Markets decided to ignore the fear signals Wednesday, pushing higher even as investor sentiment indicators stayed locked in panic mode. The Nasdaq Composite led the charge, gaining more than 100 points as technology stocks found their footing.
The rally came despite—or perhaps because of—fresh evidence that Federal Reserve officials can't agree on what to do next with interest rates. Minutes from the FOMC meeting on October 28-29, 2025 showed participants deeply divided after cutting the federal funds rate target to 3.75%-4.00%. The split is significant enough to throw cold water on expectations for another rate cut in December, which prompted markets to recalibrate their assumptions about the Fed's next moves.
Here's what actually happened with the numbers: The Dow Jones edged up around 47 points to close at 46,138.77. The S&P 500 rose 0.38% to 6,642.16, while the Nasdaq Composite climbed 0.59% to 22,564.23.
Trade Deficit Shrinks More Than Expected
On the economic data front, there was actually some decent news. U.S. exports increased $0.2 billion to $280.8 billion in August, while imports took a notable tumble, declining 5.1% to $340.4 billion. The result? The trade deficit contracted to $59.6 billion from $78.2 billion the previous month, coming in better than the $61 billion gap analysts were expecting.
Retail Earnings Tell Different Stories
Lowe's Companies Inc. (LOW) shares jumped 4% after the home improvement retailer beat Wall Street profit expectations for the third quarter, though sales came up slightly short. Meanwhile, Target Corp. (TGT) had a more complicated day—the company reported earnings that topped estimates but delivered disappointing sales figures and trimmed its full-year earnings outlook just as the critical holiday shopping season approaches.
Most sectors in the S&P 500 ended in positive territory, with information technology, communication services, and materials stocks posting the strongest gains. Energy and utilities were the outliers, bucking the broader trend to close lower.
Fear Index Stays Frozen
The CNN Money Fear and Greed Index showed almost no movement Wednesday, registering 11.45 compared to the prior reading of 11.52. That keeps it firmly in "Extreme Fear" territory, where it's been camped out despite the market's upward drift.
For context, the Fear & Greed Index measures current market sentiment on a scale from 0 to 100, where 0 represents maximum fear and 100 signals maximum greed. It's calculated using seven equal-weighted indicators, based on the idea that excessive fear tends to push stock prices down while excessive greed lifts them higher.
Looking ahead, investors are waiting on earnings reports from Walmart Inc. (WMT), Maximus Inc. (MMS), and Intuit Inc. (INTU).
