The Fed held rates at 3.75% to 4.00% on Wednesday, but the vote was 10-2. Governor Lisa Cook and Cleveland Fed President Beth Hammack both dissented in favor of a quarter-point hike. A sitting governor and a regional president have not dissented together on the same decision since April 2026. That six-month gap is the number that matters this morning, because it reframes the December meeting as something closer to a coin toss than a formality.
Chair Warsh offered no explicit signal on December, telling reporters only that the coming weeks would be an "information-rich interval." The 10-year Treasury yield rose 5 basis points to 5.044% barely flinching at the statement. The 2-year shed less than a basis point to 4.731%.
Yields moved as if the hold were fully priced, which it was. But the two hawkish dissents shifted the internal balance closer to action than any post-September meeting had suggested. The first test arrives this morning at 8:30 a.m. with GDP and core PCE.
WTI crude settled at $102.78, up $2.88 or 2.88%. Brent closed at $115.32, up 1.3%. The catalyst was not the Fed but a report that the U.S. has told Gulf allies to prepare for renewed strikes on Iran after next Tuesday's midterm elections.
That pushed WTI back above $100 for the first time since Monday. With yields already near 5% and core PCE due this morning, another oil-driven inflation impulse lands at the worst possible moment for the doves on the committee.
Alphabet fell roughly 10% after the close, to about $288, after posting its first top-and-bottom-line miss in nearly four years. Revenue came in at $127.58 billion against a $128.22 billion estimate. EPS was $2.12, well below last year's $2.87. Capital expenditures hit $51.4 billion, producing negative free cash flow of $9.1 billion.
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Microsoft moved the opposite direction, rising about 4% after hours on $92.3 billion in revenue against a $90.6 billion estimate. Azure grew 48%, 3.2 points above consensus. The divergence puts the Nasdaq's open in tension: its two largest components are pulling in opposite directions.
The S&P 500 finished at 7,743.98, up 0.28%, its third straight gain. The index sits about 1% below the October 6 record of 7,818.93. The Dow added 0.19% to 52,475.10. The Nasdaq gained 0.27% to 26,549.85. Those small moves mask what is coming: Alphabet alone carries enough index weight to erase several days of grinding gains if its after-hours price holds at the open.
Three releases land simultaneously at 8:30 a.m. The advance Q3 GDP estimate carries a consensus of 3.2% annualized, a full point above Q2's 2.2%. A beat would reinforce the case Cook and Hammack made with their dissents.
September core PCE, due at the same time, has a consensus of 0.3% month-over-month and 3.1% year-over-year up from August's 3.0%. A print at or above consensus would mark a four-month high and add pressure on December pricing.
Weekly jobless claims round out the 8:30 slate, with consensus at 198,000 versus last week's 194,000. Amazon reports after the close, with analysts expecting roughly $1.96 to $2.01 in earnings per share.
