Market Insights - October 28, 2026
By Kathleen Brooks, Research Director UK
Key Highlights
- The UK Budget is set to be unveiled by the Chancellor amidst a global stock rally, particularly in tech stocks.
- SK Hynix shares surged over 10% following record quarterly revenues and a sold-out status for memory chips.
- Microsoft and Alphabet are expected to report earnings that will shed light on how major tech companies are monetizing their AI investments.
- Fed funds futures indicate a 76% probability of a US interest rate hike in December.
- Brent crude oil prices have risen above $110 per barrel due to geopolitical tensions.
UK Budget Day
As the Chancellor prepares to present the UK Budget around 12:30 PM, expectations are for a stable budget with minimal surprises. Despite a positive global sentiment, UK assets are struggling, with the pound and FTSE 100 showing slight declines. The bond market has seen a flattening of the yield curve, indicating a recovery in long-end yields, influenced by rising energy prices.
Tech Sector Rally
The focus on the AI sector has intensified, particularly after SK Hynix's impressive earnings report, which has revitalized investor interest. The company announced record revenues and a robust shareholder return policy, leading to a significant rally in the Korean stock market. Upcoming earnings reports from Microsoft and Alphabet are highly anticipated, as they will provide insights into the profitability of AI investments.
Market Sentiment and Fed Outlook
Despite rising oil prices and various geopolitical risks, the tech stock rally remains strong. The upcoming Federal Reserve meeting is viewed as a secondary concern, although there is a notable expectation for a rate hike in December. Analysts predict that the Fed's stance will remain hawkish, particularly in light of ongoing inflation concerns.
Geopolitical Factors
The oil market is experiencing upward pressure due to potential military actions following the US Midterm elections. Analysts expect Brent crude prices to remain elevated until the political landscape stabilizes post-elections.