Treasury yields surged after Federal Reserve Chair Jerome Powell said a December rate cut was not to be counted on despite a reduction in the benchmark rate to 3.75% to 4%. Powell's comments led traders to revise expectations for future rate cuts, causing a significant sell-off in the bond market. The Fed also announced the end of its balance sheet reduction program, further influencing market dynamics.

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US stocks ended mixed Wednesday after Federal Reserve Chair Jerome Powell said a December rate cut was "far from" certain. The Dow slipped 0.2%, while the S&P 500 was flat and the Nasdaq gained 0.5%, buoyed by tech strength. Nvidia and Apple hit new milestones, with Nvidia topping $5 trillion in market value and Apple closing above $4 trillion, offsetting weakness from tariff worries and profit-taking in other sectors.

Global bond markets have rebounded in October, with UK, German and Japanese yields experiencing significant drops amid easing concerns about inflation and government borrowing. UK gilts have led the rally, with 10- and 30-year yields falling about 30 basis points. However, analysts remain cautious because high debt levels and potential political instability in France and the UK could pose risks.

Bank of America expects the Treasury to favor short-term bills in its upcoming financing plan, a move the bank says could push 10-year note yields down by roughly 30 basis points. Strategists led by Meghan Swiber estimate the increased bill share, rising to about 25% of total debt, would trim long-term supply by the equivalent of $1 trillion in 10-year notes, easing upward pressure on yields ahead of the Fed's expected quarter-point rate cut.

Federal Reserve Chair Jerome Powell has highlighted divisions within the Federal Open Market Committee regarding further interest-rate cuts, emphasizing that another cut in December is not a certainty. Powell noted robust consumer spending alongside a significant slowdown in hiring, complicating the economic outlook. The Fed cut rates by a quarter-point this week but the decision saw split dissents for the first time since 2019, reflecting differing views on the need for further easing.

Bipartisan negotiations to end the 29-day government shutdown are showing signs of renewed momentum, with Senate Majority Leader John Thune indicating he expects to engage with Senate Democrats soon. While formal leadership-level talks between Thune and Senate Minority Leader Chuck Schumer have not occurred, informal discussions among rank-and-file members are intensifying as critical deadlines approach, including the looming cutoff of federal food aid.

The Municipal Securities Rulemaking Board (MSRB) plans to seek additional comment on amending Rule D-15, which defines "sophisticated municipal market professionals" (SMMPs). The proposal would remove the requirement for SEC-registered investment advisers to affirm their SMMP status, a change supported by the industry. "SIFMA has been urging MSRB to amend Rule D-15, and is pleased that the MSRB is planning to request comments on the rule," said SIFMA's Leslie Norwood.

US President Donald Trump and Chinese President Xi Jinping have reached a one-year trade agreement that includes the postponement of Chinese export controls on rare earths and a reduction in US tariffs on fentanyl-related products. The deal, announced after a summit in South Korea, aims to