Investors face a busy week ahead, with a high-profile meeting between U.S. and Chinese leaders, a flood of big-tech earnings, and interest rate decisions from three major central banks. Attention will also turn to the earnings of Caterpillar Inc., a bellwether for the industrial economy.
1. Trump–Xi Meeting
One of the most closely watched events of the week will take place on Thursday, when U.S. President Donald Trump meets with Chinese President Xi Jinping in South Korea.
Markets are hoping the summit between the world’s two largest economies will produce a trade agreement or at least reduce tensions. Over the weekend, negotiators from both countries said they had reached a draft framework, with final details expected to be worked out before the meeting.
Trump had recently threatened triple-digit tariffs on Chinese goods in response to Beijing’s expanded export controls on rare earth minerals, which are critical to industries such as semiconductors and electric vehicles. But U.S. Treasury Secretary Scott Bessent suggested that following negotiations, the U.S. “will not impose the heightened tariffs,” while China is prepared to make “concessions” on export restrictions.
2. Big Tech Earnings Take Center Stage
This week also brings a wave of corporate earnings, with a blockbuster 48-hour stretch featuring five major technology giants that have driven much of the broader market’s performance in 2025.
After the closing bell on Wednesday, Microsoft (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), and Meta Platforms (NASDAQ:META) will report their quarterly results. They’ll be followed by Apple Inc. (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN) on Thursday.
Artificial intelligence spending plans are expected to be a focal point for investors. While some analysts have raised concerns about a potential AI bubble, the race to develop and monetize the technology remains intense — and has been credited with supporting U.S. growth during a period of global uncertainty.
3. Caterpillar in Focus
Beyond tech, investors will keep a close eye on Caterpillar Inc. (NYSE:CAT), which reports earnings before Wednesday’s market open.
The company warned in August that U.S. tariffs would create significant headwinds in the second half of 2025. Third-quarter costs tied to the tariffs are expected to range from $400 million to $500 million, potentially rising to as much as $1.5 billion for the full year.
This comes as the Trump administration has increased the effective U.S. tariff rate to 18% — the highest in nearly a century.
4. Federal Reserve Meeting
The Federal Reserve kicks off its two-day meeting on Tuesday, with a decision on interest rates due Wednesday. According to the CME FedWatch Tool, markets are pricing in a near-certain 25 basis-point rate cut from the current 4%–4.25% target range.
This would mark a second consecutive cut following a similar move in September. Fed policymakers appear to be prioritizing support for the labor market over concerns about sticky inflation, a stance reinforced by softer-than-expected September inflation data.
However, the ongoing U.S. government shutdown has deprived the Fed of key economic indicators, potentially complicating its policy calculus.
5. Bank of Japan and ECB Decisions
Outside the U.S., other major central banks will also make rate decisions this week. The Bank of Japan is expected to debate whether conditions now justify raising rates amid easing fears of a tariff-induced recession.
Still, with Sanae Takaichi recently becoming Japan’s Prime Minister, most analysts believe the BOJ will keep borrowing costs unchanged, in line with her preference for expansionary economic policies.
Meanwhile, the European Central Bank is widely expected to leave its deposit rate at 2% at its Thursday meeting.
In a note to clients, analysts at UBS said the ECB is likely to stress that policy is “in a good place” and emphasize that future decisions will be data-dependent, without committing to a specific path for rates.