Happy Halloween!
Don’t eat too much candy today… at least not before the closing bell.
Because before you shut down for last-minute costume fixes, or another bag of candy, I’ve got one quick thing for you:
A closer look at the Fed’s move—and what Powell said that’s keeping traders on edge.
The markets barely moved, with all the major indexes ending the day just a hair below the flatline.
Now at first glance, that kind of flat finish may not seem like much… but it actually tells us quite a bit.
Because while the quarter-point rate cut itself was expected (and already priced in), it was what came after the announcement that really mattered.
And that’s exactly what we’re digging into today.
But first, a little housekeeping…
By now, you’ve likely received an invitation to join a free webinar I’m hosting on Wednesday, November 5.
In it, I’m going to share the top three strategies I use to profit from both hard and digital assets.
You’ll also see how I’m positioning my next round of trades heading into the end of the year.
But I understand there’s been some confusion about the time it’s starting (apologies). So, to clarify, I’m kicking things off at 7pm ET on Wednesday, November 5.
So, if you haven’t already, click here to sign up now.
And let’s get to the mailbag…
Q: Hey there, Tom. Is there anything you’re focused on with the Fed decision today?
Great question! And yes, definitely…
While the cut itself was largely anticipated, the real market mover was Powell’s comments AFTER. Specifically, the fact that he made a point to say a December rate cut is not a foregone conclusion.
That line right there? That’s what turned the tide and brought in some sellers.
Here’s why…
The rate cut was what traders call “baked in”—meaning the market had already adjusted in anticipation of it. So, the focus shifted almost immediately to what’s next. Powell’s hesitation about another rate cut introduced a layer of uncertainty that markets weren’t necessarily ready for.
And here’s where it gets even more interesting…
I came across a note from JPMorgan’s trading desk that really caught my attention. It pointed out how rare it is for the Fed to cut rates while the market is at or near all-time highs.
In fact, according to their data, it’s only happened four other times in history. And when it has? The S&P 500 has posted an average gain of 20% over the following year.
So yes… I’m watching this closely. And you should be, too—because this could be the setup for a very bullish move in the months ahead.
Q: Hi Tom. Thanks for taking the time to answer our questions. I see that NVDA is at a $5 trillion market cap. What does market cap mean, and how does it affect me?
You’re welcome—and great question!
Market cap, short for market capitalization, is basically the total value of a company’s outstanding shares. It’s calculated by multiplying the share price by the number of shares in circulation.
So when you hear NVDA hit a $5 trillion market cap, that means the collective market believes the company is worth $5 trillion based on its current stock price.
Why does that matter?
Because market cap is one of the key metrics investors use to assess a company’s size, stability, and potential risk. A $5 trillion market cap puts NVDA in incredibly rare territory—and it reflects how much investor confidence is currently baked into that stock.
Q: When someone says a move is “baked in” to the market, what exactly does that mean?
Another good question! And it’s not a Food Network reference.
When you hear the term “baked in”, it refers to the expectations that have already been priced into the market.
For example, if traders expect the Fed to cut rates, they may start buying stocks in anticipation. That means the BIG market-moving reaction has already happened by the time the announcement’s officially made.
So even though the event itself (the Fed’s announcement) is technically “new,” it doesn’t spark a major market reaction… because the market already adjusted in advance.
That’s why you’ll sometimes see a stock fall even after what seems like good news. If that good news was already expected, then there’s no surprise to move prices further. The move has already happened.
Remember, surprises move markets—not confirmations of what’s already expected.
So, what’s next?
As we head into the weekend, I’ll be watching closely to see whether we’re looking at a classic “sell the news” pullback—the kind where buyers step back in quickly—or something that signals deeper concern.
We’ve also got some upcoming earnings to discuss—and the top reports to keep an eye on
In the meantime, keep those questions coming… and if you want to dive deeper into how I’m positioning my trades right now, check out the latest briefing here.
Talk soon,
Tom Gentile
America’s Pattern Trader
