A sense of anticipation hung over global markets on Tuesday as investors hit the pause button ahead of the Federal Reserve’s latest policy meeting. With U.S. stocks pulling back from record highs, Asian markets followed suit, posting broad declines. The S&P 500 dropped 0.3% and the Hang Seng lost 0.8%, reflecting a nervous wait for the central bank’s decision on interest rates.
While the broader market was quiet, the boardroom action was frenetic. Paramount launched a surprise hostile bid for Warner Bros. Discovery, offering an all-cash deal to trump a pending merger with Netflix. The move sent Warner Bros. stock up and Netflix stock down, injecting fresh volatility into the media sector. Simultaneously, IBM made a splash with an $11 billion deal to buy Confluent, betting big on the future of data and AI.
Geopolitics also played a role in market movements. Nvidia shares rallied in extended trading after receiving permission from the Trump administration to sell high-end AI chips to China. The decision was framed as a positive diplomatic gesture, with President Trump noting a favorable response from Beijing. Experts warn, however, that this could narrow the gap between U.S. and Chinese AI capabilities.
In the background, economic fundamentals remain mixed. The Reserve Bank of Australia kept rates on hold, offering no new relief to its market. In the U.S., inflation remains above target, and Fed officials are divided on the economic outlook. This split opinion is creating uncertainty about the long-term path of interest rates, leaving investors guessing about 2026.
As oil prices slipped and currencies fluctuated, the market’s focus narrowed to Wednesday. The Fed’s commentary will be the deciding factor for the week, determining whether the current dip is a buying opportunity or a warning sign of deeper economic trouble ahead.