(The opinions expressed here are those of the author, a

columnist for Reuters)

By Mike Dolan

Oct 28 (Reuters) - What matters in U.S. and global

markets today

By Mike Dolan, Editor-At-Large, Finance and Markets

Bulled up by another wave of AI deal-making and earnings

excitement and with interest rates about to fall again, Wall

Street now faces two days of critical monetary policy, earnings

and global trade events that will test week's optimism.

Despite months of fretting about possible bubbles in the AI gold

rush, the world's most valuable stock, AI chip giant Nvidia, is

poised to top $5 trillion in market value for the first time at

the market open on Wednesday - just three months after it

crossed the $4 trillion mark. Microsoft and Apple are now above

or flirting with $4 trillion market caps too.

The top four U.S. megacaps now have a market value in excess

of the entire European STOXX 600 index, which is just under $14

trillion.

Nvidia shares jumped 5% on Tuesday and another 2.8% in premarket

trade today after CEO Jensen Huang announced $500 billion in AI

chip orders and plans to build seven supercomputers for the U.S.

government.

And with optimism rising this week around some trade war detente

at Thursday's crucial summit between President Donald Trump and

China's President Xi Jinping in South Korea, Trump praised

Nvidia's flagship Blackwell model as a "super-duper chip" and

said he might speak to Xi about it following on-off curbs on

tech exports this year.

Meantime, Microsoft, Meta and Alphabet report earnings updates

after Wednesday's market close and Apple and Amazon are out

Thursday. Microsoft shares jumped 2% on Tuesday after it and

OpenAI announced a restructuring that frees the ChatGPT maker to

move away from nonprofit roots and go public - allowing it to

finance CEO Sam Altman's ambitious plans to develop data centers

and cutting-edge technology.

With AI bullishness in overdrive, the potential downside of the

technology was also in evidence this week - with sweeping job

cuts announced by the likes of Amazon and UPS. With official

economic data still absent due to the government shutdown, a

preliminary estimate of an ADP National Employment Report showed

the U.S. economy added an average of 14,250 jobs in the four

weeks ending October 11.

And it is softness in the labor market that's likely to keep the

Federal Reserve cutting interest rates later on Wednesday, this

time by another quarter point to below 4% for the first time in

three years. Investors will also watch closely for an

announcement on the end of its balance sheet rundown, so-called

"quantitative tightening".

Despite another heavy week of new debt sales, Treasury

yields were subdued ahead of the decision - with the MOVE gauge

of bond market volatility falling to its lowest in four years

this week. The dollar was marginally firmer.

And with AI driving the megacaps, Wall Street index futures

were up again ahead of today's bell after hitting record closing

highs on Tuesday.

Elsewhere, the Bank of Canada is also expected to cut its

interest rates today by a quarter point. Tomorrow's decisions

from the European Central Bank and Bank of Japan are expected to

leave policy unchanged there.

In the thick of the European earnings season, Deutsche Bank

rose 1% after its positive earnings - but UBS dropped 1% despite

a forecast-beating 74% surge in net profit.

In today's column, I discuss the latest collapse in U.S.

Treasury bond volatility and how it flies in the face of crisis

warnings throughout the year.

Today's Market Minute

* Donald Trump

and South Korean President Lee Jae Myung finalised

details of their fraught trade deal at a summit in South Korea

on Wednesday, and the

*

*

*

*

Chart of the day

Nvidia was set to make history on Wednesday by becoming the

first company to notch $5 trillion market value, extending a

powerful rally that has cemented its place at the center of the

artificial intelligence boom. President Donald Trump said he

will speak to Chinese President Xi Jinping about Nvidia's

state-of-the-art Blackwell AI chip at their expected meeting on

Thursday. Sales of the U.S. firm's high-end AI chips to China,

which accounted for 13% of its revenue in the past financial

year, have been a key sticking point in protracted trade talks

between the world's two largest economies this year.

Today's events to watch

* U.S. Federal Reserve's Federal Open Market Committee

policy decision (2:00 PM EDT), with press conference from Fed

Chair Jerome Powell (2:30 PM EDT)

* Bank of Canada interest rate decision (9:45 AM EDT)

* U.S. corporate earnings: Microsoft, Meta, Alphabet, eBay,

MGM, Boeing, Caterpillar, Equinix, Ventas, Verizon, Kraft Heinz,

Everest, Starbucks, CVS, Centene, Align, GE Healthcare, Tyler,

Fiserv, Masco, Cognizant, AvalonBay, ADP, Otis, Chipotle,

DaVita, Garmin, Rollins, Dayforce, ServiceNow, NiSource, KLA,

Smurfit Westrock, American Water Works, American Electric Power,

Phillips 66, IDEX, Fortive, TE, Verisk, Generac, CH Robinson,

Extra Space, Public Storage, Essex Property, Entergy, UDR

* U.S. Treasury sells 2-year floating rate notes

* U.S. President Donald Trump visits South Korea

Want to receive the Morning Bid in your inbox every weekday

morning? Sign up for the newsletter

here

. You can find ROI on the

Reuters website

, and you can follow us on

LinkedIn

and

X.

Opinions expressed are those of the author. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.