Wall Street has found a new way to play artificial intelligence on Fed day, and it runs through the plug socket rather than the chip. Vertiv, the company that keeps data centres powered and cool, is up about 16% before the open after a blowout quarter, and the rest of the electricity crowd is coming along for the ride.
That matters because the market is heading into a heavy evening. The Federal Reserve announces its decision at 18:00 UK time, Kevin Warsh speaks half an hour later, and Microsoft and Alphabet report after the close. Traders are choosing to back the companies that get paid whoever wins the AI arms race, while handing out harsh treatment to anything that disappoints.
The Situation Right Now
US futures are firm but not frantic. S&P 500 futures are up around 0.2% near 7,772 and Nasdaq 100 futures are up about 0.45% near 29,945, while Dow futures are slightly lower. That follows a decent Tuesday, when the S&P 500 closed up 0.6% at 7,722.60 and the Nasdaq Composite gained 1.2%.
Europe is quieter and a touch weaker. The FTSE 100 is down about 0.3% as London waits for the Budget at lunchtime, the Stoxx 600 is slightly lower and the DAX is flat. Asia was the real fireworks: South Korea’s KOSPI closed up 6.6% on the back of SK Hynix’s record quarter, and Taiwan gained 2%. Volatility is calm, with the VIX near 17.5.
What Changed Since This Morning?
The tone has improved a little since breakfast. At 05:00 UK, S&P futures were flat and Dow futures were down 0.2%; both have clawed back ground as the US earnings came through. Treasury yields have eased slightly, with the 10-year back near 5.01% from about 5.02%, and the dollar index has drifted to 102.35.
The bigger change is the stock-level news. Vertiv, GE Vernova and GE HealthCare reported overnight and early this morning, and the reaction has turned the conversation from chips and apps towards the hardware that keeps the lights on.
The Biggest US Market Story: AI Needs More Power
Vertiv’s numbers were the kind that make analysts check twice. Third-quarter sales came in at $4.31 billion against estimates of $3.76 billion, adjusted earnings per share were $2.21 versus $1.82 expected, and organic orders more than doubled from a year ago. The company raised its full-year outlook to between $14.45 billion and $14.85 billion in revenue.
GE Vernova added to the theme. Revenue rose 27% to $12.64 billion, orders jumped 96% to $29.3 billion and the backlog now stands at $197 billion. It lifted its 2026 outlook for the third time this year and agreed to buy Trench Group for $9 billion to strengthen its grid business. The shares are up about 1.7% before the open after rising 4.7% on Tuesday, and Eaton, another power equipment name, is up around 4%.
The logic is simple. Every new AI data centre needs enormous amounts of electricity, cooling and grid equipment before a single chip is switched on. Companies such as Vertiv and GE Vernova sit at that bottleneck, and their order books suggest the spending is still accelerating rather than levelling off. For investors nervous about whether AI products will ever earn its keep, these are the businesses with the cash coming in today.
Stocks Moving Before The Open
The winners are clustered around power and industrial demand. Vertiv leads, Eaton is up about 4%, Caterpillar is up nearly 3% and GE HealthCare is up around 8% after lifting its earnings guidance.
The losers show how little patience there is for a miss. Enphase Energy is down roughly 19% after missing on revenue and guiding well below expectations for the fourth quarter, as US home solar demand stays weak. Logitech is down about 12%, NXP Semiconductors around 7% and F5 nearly 7% after their results. Robinhood is off about 6.6% and Visa about 2% despite beating forecasts, with Visa’s guidance for next year described as modest. Seagate is down about 2% after a record quarter, which looks like profit-taking after a huge run this year.
Among the giants, Alphabet is up about 1.5% before tonight’s results, while Microsoft is a touch lower. That split is worth watching into the close.
FX & Dollar
The dollar is steady ahead of the Fed. The dollar index is little changed near 102.35, the euro is at $1.1129 and dollar-yen is just under 158, still close to the levels that have made Tokyo nervous. Sterling is about 0.1% lower at $1.3288 and the euro has firmed against the pound, with EUR/GBP up 0.2% to 0.8374. The Chancellor’s statement at lunchtime is the immediate risk for the pound.
Bonds
The US 10-year Treasury yield is hovering around 5.01%, with the 2-year near 4.75% and the 30-year at 5.31%. A 10-year yield at 5% is a high hurdle for expensive growth shares, which is part of why investors are rewarding companies with real orders and real cash. UK 10-year gilts are near 5.36% and 30-year gilts around 5.76% ahead of the Budget, while French yields are up about 5 basis points.
Commodities
Oil is firm again. Brent is up about 1.3% at $115.32 a barrel and US crude is up nearly 1.9% at $101.79, keeping pressure on inflation expectations and on the Fed. Natural gas is up around 2.5%. Gold futures are slightly lower near $4,062 an ounce, and silver is down about 1.1%. Bitcoin is up 0.7% at around $81,275.
Today’s Remaining Catalysts
The UK Budget comes first at around 12:30 UK time, with gilts and sterling the markets most exposed. The US cash open follows at 13:30 UK. The Fed’s decision lands at 18:00 UK, with markets expecting rates to stay at 3.75% to 4.00%, and the press conference at 18:30 is where the real move could come, because traders want to know whether high oil prices make further cuts harder. Microsoft and Alphabet then report after the US close, which will decide whether the AI spending boom gets another vote of confidence tonight.
Levels Traders Are Watching
On the S&P 500, Tuesday’s close at 7,722.60 and the 7,700 area are the nearby references, with futures trading above both. For the Nasdaq 100, the 30,000 round number in futures sits just overhead. The 5% line on the US 10-year yield matters for growth shares, $115 is the reference on Brent, $4,000 on gold, 158 on dollar-yen and $1.33 on sterling. These are reference points, not targets.
Where This Leaves Us
The bias going into the open leans cautiously positive. Futures are higher, volatility is low and the strongest earnings are coming from companies with booked orders rather than promises, which is a healthier foundation than a rally built on hope alone. The evidence for that view is the size of Vertiv and GE Vernova’s order books and the steady improvement in futures since this morning.
The risks are plain enough. Oil above $115 keeps inflation worries alive, the 10-year yield sitting on 5% leaves little room for a hawkish surprise from Warsh, and the sharp falls in Enphase, Logitech and NXP show how quickly the market punishes disappointment. The opportunity, for those who study it, is in watching whether the power and infrastructure theme holds through the open or fades once the excitement wears off. The view would change if the Fed signals that rate cuts are off the table, or if Microsoft and Alphabet suggest AI spending is slowing.
The markets to watch are the S&P 500, the Nasdaq 100, the 10-year Treasury yield, Brent crude, dollar-yen and sterling. For beginners, the lesson is that the companies selling the tools behind a boom can sometimes be steadier than the headline names, but no theme goes up in a straight line, and big events like a Fed decision can change the mood in minutes.
If you want to understand how your own trading decisions hold up on a day like this, the Samuel & Co Trading Trader Assessment is a good place to start. It helps you see where your strengths are and what to work on before the next big market event.
