October 28, 2025

Amazon Cuts 30,000 Jobs as Markets Brace for Fed Rate Decision and Big Tech Earnings

The Market Mic Drop

"Global markets are at a pivotal moment, anticipating a Federal Reserve interest rate cut and the end of quantitative tightening, while major tech firms restructure for AI dominance, corporate M&A activity surges, and the US and China continue their strategic economic decoupling."

Investor Action

Investors should prepare for potential market volatility surrounding the Federal Reserve's interest rate decision, as high expectations are already priced in. The aggressive pivot to AI by major tech companies highlights a significant long-term growth trend, though it also brings restructuring risks, such as large-scale job cuts. Ongoing geopolitical tensions and economic decoupling between the U.S. and China underscore the importance of maintaining a diversified portfolio to mitigate risks from supply chain disruptions and policy shifts.

Market Snapshot

📈 S&P 500: 6,875.16 (+1.23%)
📈 Dow Jones Industrial Average: 47,545 (+0.71%)
📈 NASDAQ Composite: 23,637 (+1.86%)
📉 US 10-Year Treasury: 3.981% (-0.15%)
📉 Gold: $3,915 (-1.68%)
📈 Bitcoin: $114,464 (+0.30%)
📉 Ethereum: $4,111 (-0.23%)
📉 FTSE 100 (U.K.): £9,664 (-0.17%)

Global Markets Brace for Federal Reserve Decision

Global equities reached record closing highs on Monday, propelled by optimism surrounding a potential U.S.-China trade agreement. However, the rally, which has added over $4 trillion to global equity values in three weeks, is showing signs of slowing as investors adopt a more cautious stance ahead of a pivotal week featuring Big Tech earnings and a crucial U.S. Federal Reserve policy decision.

The Fed is widely expected to cut its benchmark interest rate by 25 basis points, with traders pricing in a 97.8% probability of the move. This decision comes at an unusual time, as a prolonged government shutdown has prevented the release of key economic data, including jobs and unemployment figures, which would typically inform the central bank's policy. The Fed may also announce an end to its Quantitative Tightening (QT) regime, which began in 2022. While a rate cut is anticipated to support a 'soft landing' for the economy, analysts caution that high expectations for both a dovish Fed and strong corporate earnings are already reflected in current market prices.

The AI Revolution: Big Tech Restructures for the Future

A strategic pivot towards artificial intelligence is reshaping the technology sector, prompting significant corporate restructuring, workforce reductions, and major investments in infrastructure and hardware.

Amazon's Major Workforce Reduction

Amazon has announced plans to cut as many as 30,000 corporate and tech positions. The redundancies will affect nearly every division as the company aims to reduce layers, become more lean, and free up capital for substantial AI investments. CEO Andy Jassy has previously indicated that AI would enable a permanent reduction in the company's workforce, with the current move driven by a focus on efficiency following over-hiring during the pandemic.

The AI Chip Race and Power Demands

The competition in AI hardware has intensified, with Qualcomm entering the AI data centre chip market to challenge leaders Nvidia and AMD. Qualcomm shares surged over 11% following the news. The company will focus on AI inference workloads and has already secured a deployment deal with HUMAIN, a firm founded by Saudi Arabia’s sovereign wealth fund.

To meet the immense energy needs of this technological shift, the U.S. government has signed an $80 billion agreement with Westinghouse to build advanced modular nuclear reactors to power the nation's data centres. In a similar move, Alphabet's Google is involved in reopening a nuclear plant in Iowa to supply its facilities with clean, stable energy.

Corporate Sector Highlights

Lululemon Targets New Growth with NFL Partnership

Athleisure brand Lululemon is partnering with the NFL and Fanatics to launch an officially licensed apparel collection featuring all 32 team logos. This is part of a broader strategy to expand into competitive sports and reignite growth amid slowing sales. The company's stock rose 1.8% on the news.

Mergers and Acquisitions Heat Up

A wave of consolidation is sweeping the banking sector, particularly in Texas, where strong economic growth has made its deposit base a prime target. Huntington Bancshares announced a $7.4 billion deal for Houston’s Cadence Bank, and Fifth Third Bancorp is acquiring Dallas-based Comerica for $10.9 billion.

Elsewhere, American Water Works and Essential Utilities announced an all-stock merger to create a $40 billion utility giant. In pharmaceuticals, Novartis is set to acquire Avidity Biosciences for $12 billion to strengthen its rare disease portfolio.

Company-Specific Updates

Tesla: The company's board has warned that CEO Elon Musk may depart if his proposed $1 trillion pay package is not approved by shareholders.
iRobot: The Roomba maker's shares fell over 33% after it announced that negotiations with its last potential buyer had fallen through, leaving its search for a sale at an impasse.
HSBC: The bank reported third-quarter profits that beat analyst expectations, though the figure was down 14% from the prior year due to higher operating expenses.

Geopolitics and Global Economy

While optimism for an imminent U.S.-China trade deal has fuelled market rallies, both nations are pursuing strategies of economic decoupling. In a direct move to reduce reliance on China for materials critical to defence and technology, the U.S. and Japan signed a pact to strengthen supply chains for rare-earth minerals.

Simultaneously, China is working to reduce its dependence on the West by pushing for technological self-reliance and boosting domestic consumption. Beijing has significantly increased the use of its currency, the renminbi, which is now the second most-used currency for trade financing after the US dollar. China's cross-border payment system now handles over $5.7 trillion quarterly.

In the U.S., a prolonged government shutdown is set to impact the economy, with Supplemental Nutrition Assistance Program (SNAP) benefits scheduled to end on 1 November, affecting one in eight Americans. Elsewhere, Argentina's peso and bond prices have strengthened following positive midterm election results, while Saudi Arabia continues its economic diversification, with its investment minister stating that over half of its economy is now non-oil based.

Cryptocurrency Market Movements

Optimism around potential interest rate cuts has fuelled a sharp rebound in digital assets, with crypto investment products seeing $921 million in weekly inflows. Bitcoin funds were the primary beneficiary, adding $931 million, while Ethereum products experienced their first outflows in five weeks.

New investment products have also entered the market, with the launch of spot exchange-traded funds (ETFs) for Solana, Litecoin, and HBAR. In a significant global development, Japan's JPYC Inc. has launched the world's first legally recognised stablecoin backed by the Japanese yen. The move is expected to accelerate regulated stablecoin adoption, with the firm targeting ¥10 trillion ($65B) in circulation within three years. Institutional interest continues to grow, highlighted by a partnership between Citi and Coinbase to develop digital asset payment solutions for institutional clients.

NOTE: This content is for informational and educational purposes only and does not constitute financial advice. Always do your own research. Not financial advice (NFA).