Big Tech earnings, Fed cuts rates, Trump-Xi meeting and more in Morning Squawk

In the latest trading updates, major tech giants like Alphabet, Microsoft, and Meta Platforms exceeded Wall Street's earnings expectations, showcasing robust revenue growth and ambitious expansion strategies. However, the market's reaction to these results varied significantly among investors. The Federal Reserve's recent decision to lower interest rates by 25 basis points initially sparked optimism. Yet, Fed Chair Jerome Powell tempered enthusiasm with a cautionary note, stating that future rate cuts are not guaranteed. This statement led to a decline in stocks, dragging the Dow down after it had previously reached record highs. Powell also drew comparisons between the ongoing surge in AI investments and the late 1990s dotcom bubble, asserting that today’s AI companies are backed by solid earnings, distinguishing them from their predecessors. On the international front, President Donald Trump announced a trade agreement with Chinese leader Xi Jinping, marking a significant shift in U.S.-China relations. As part of the deal, Trump plans to reduce fentanyl-related tariffs on China, while Beijing will resume soybean purchases and act to reduce fentanyl exports to the U.S. Additionally, China has agreed to postpone export controls on rare earth materials for a year. However, not all sectors are thriving. Chipotle's shares dropped over 18% after the company missed third-quarter revenue projections and revised its sales outlook downwards due to challenges with younger consumers. Starbucks also faced a decline of around 3% after reporting earnings below expectations, despite achieving same-store sales growth for the first time in nearly two years. In a positive turn, Restaurant Brands International surpassed Wall Street forecasts, driven by strong performance from its Tim Hortons brand and international operations, leading to a 3% increase in premarket trading. Comcast reported better-than-expected earnings, although it continued to struggle with stagnant broadband subscriber growth for the fourth consecutive quarter. Analysts are keen to hear insights from Comcast's executives regarding a potential acquisition of Warner Bros. Discovery, amidst skepticism about its likelihood. In a historic milestone, Nvidia became the first company to reach a $5 trillion market capitalization, a valuation that reflects its dominance in the tech industry, equivalent to the size of two Amazons or six JPMorgan Chases.