Market Beats | US, South Korea Finalize Trade Deal; Nvidia Nears $5 Trillion Valuation; Kraft Heinz Cuts Sales Outlook Amid Weak US Consumer Spending; Fiserv Shares Plunge Record 46% After Earnings Cut; US Pending Home Sales Stall in September; Federal Reserve to End Balance Sheet Reduction in December; Alphabet Reports Quarterly Sales Above Estimates

—— US, South Korea Finalize Trade Deal; Nvidia Nears $5 Trillion Valuation; Kraft Heinz Cuts Sales Outlook Amid Weak US Consumer Spending; Fiserv Shares Plunge Record 46% After Earnings Cut; US Pending Home Sales Stall in September; Federal Reserve to End Balance Sheet Reduction in December; Alphabet Reports Quarterly Sales Above Estimates

1. US, South Korea Finalize Trade Deal

US President Donald Trump and South Korean President Lee Jae Myung finalized a trade deal Wednesday, concluding months of negotiations following a framework agreement reached in July.

Under the deal, Seoul will make $150 billion in shipbuilding investments, with an additional $200 billion designated for an investment pledge modeled after a similar deal with Japan, South Korean Policy Chief Kim Yong-beom said Wednesday. The structure allows South Korea to use not only equity but also loans and loan guarantees to fulfill the investment plan — a key US concession.

Trump called his meetings with Lee “tremendous,” adding that the two sides had “pretty much finalized a trade deal” during a dinner hosted by the South Korean president. “I think we came to a conclusion on a lot of very important items,” he said.

The won strengthened as much as 0.9% against the dollar after news of the deal broke. South Korea’s finance minister said last week that the currency’s recent weakness reflected concerns over the lack of an agreement. Officials on both sides had previously downplayed the likelihood of sealing the deal during Trump’s visit — an accord that will cap US tariffs on South Korean goods at 15%.

US duties on Korean car imports, which had remained at 25% during the talks, will now be reduced to 15%, putting Korean automakers on a more level playing field with their Japanese rivals, Kim said.

Just days before the agreement was finalized, Lee said key details of the $350 billion investment package remained unresolved, while Trump called the deal “pretty close,” underscoring a gap in perceptions even as negotiations neared completion.

The agreement runs through January 2029, though disbursement will be spread over several years, Kim added. South Korea will also receive guarantees that its pharmaceutical exports will enjoy the lowest tariff rates granted to any US trading partner.

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2. Nvidia Nears $5 Trillion Valuation

Nvidia Corp. is poised to become the first company ever valued at $5 trillion, as Chief Executive Officer Jensen Huang’s aggressive wave of deals propels the artificial intelligence frenzy to new heights.

Shares rallied 3.5% to $208.05 in premarket trading, signaling that Nvidia will cross the milestone once regular trading begins. It’s been just four months since the company surpassed the $4 trillion mark, and the rally has accelerated as Huang signs new agreements to supply chips to companies including Nokia Oyj, Samsung Electronics Co., and Hyundai Motor Group.

In a bull market driven by expectations that AI will transform the global economy, Nvidia stands in a league of its own. The stock has gained 50% this year, accounting for nearly one-fifth of the S&P 500 Index’s 17% advance in 2025. The next two largest companies, Microsoft Corp. and Apple Inc., each have market valuations of roughly $4 trillion.

Nvidia shares also climbed Tuesday after US President Donald Trump said he expects to speak with China’s President Xi Jinping about the company’s Blackwell chip. Trump previously suggested he may allow Nvidia to export a downgraded version of the Blackwell processor to China — raising hopes that such a deal could be revived.

On Monday, Huang announced a flurry of new partnerships and dismissed concerns about an AI bubble, saying Nvidia’s latest chips are on track to generate $500 billion in revenue. The company also unveiled a new system connecting quantum computers with its AI chips, underscoring its growing role in next-generation computing.

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3. Kraft Heinz Cuts Sales Outlook Amid Weak US Consumer Spending

Kraft Heinz Co. lowered its full-year sales outlook, signaling growing weakness among US consumers as the maker of Kraft Mac & Cheese and Heinz ketchup prepares to split its business.

The company now expects full-year organic net sales to decline by 3% to 3.5%, compared with its previous forecast for a drop of 1.5% to 3.5%. Kraft Heinz cited slower growth in emerging markets and “pressure” in US retail, while also cutting its profit forecast.

“The operating environment remains challenging,” Chief Executive Officer Carlos Abrams-Rivera said in a statement. The company added that its plan to separate into two entities remains on track for the second half of next year. Shares were little changed in premarket trading Wednesday. The stock has fallen 17% this year through Tuesday’s close, compared with a 17% gain in the S&P 500.

Kraft Heinz has struggled to win investor support for its plan to split its portfolio into two companies at a time when consumers are increasingly moving away from processed foods. One company will include its faster-growing brands — such as Heinz condiments and boxed meals — while the other will house slower-growing grocery staples like Oscar Mayer deli meats and Lunchables.

For the third quarter, Kraft Heinz reported a 2.5% drop in organic revenue — steeper than analysts’ expectations — as sales of coffee, cold cuts, frozen snacks and some condiments declined.

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4. Fiserv Shares Plunge Record 46% After Earnings Cut

Fiserv Inc. suffered its biggest-ever stock drop after the fintech company slashed its full-year earnings outlook and announced a sweeping overhaul of its board and top leadership team.

The firm, one of the largest technology providers to banks, reduced its forecast for adjusted earnings per share this year to between $8.50 and $8.60, down from its previous range of $10.15 to $10.30. Adjusted third-quarter revenue and EPS both missed analysts’ expectations by wide margins.

“Our current performance is not where we want it to be nor where our stakeholders expect it to be,” Chief Executive Officer Mike Lyons said in a statement.

Fiserv shares plunged 46% — their steepest single-day decline on record. Analysts were stunned by the abrupt deterioration in the business. Jefferies analyst Trevor Williams said the scale of the miss and the downgrade “is difficult to comprehend.”

“To be frank, we are struggling to recall a miss and guide down to this degree in any of the sub-sectors we have covered,” said Matthew Coad, an analyst at Truist Financial Corp.

Bloomberg Intelligence analyst Diksha Gera said management’s explanations “weren’t convincing on what drove the steep change in revenue assessment, nor did they inspire confidence that there will be no more surprises.” She added that “there’s still significant uncertainty over how conservative or aggressive these cuts are — and whether more could follow.”

Revenue in the company’s financial-solutions segment fell 3%, bringing its total share-price decline this year to 67%.

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5. US Pending Home Sales Stall in September

Pending sales of existing US homes were unchanged in September, indicating that job market anxiety kept potential buyers on the sidelines despite easing mortgage rates.

An index of contract signings held steady at 74.8 after rising a revised 4.2% in August — the highest level since March — according to data released Wednesday by the National Association of Realtors. Economists surveyed by Bloomberg had expected a 1.2% increase.

Even with the flat reading, housing economists say the resale market is showing tentative signs of thawing after years of sluggish demand. Mortgage rates have stabilized below 6.5%, and home prices are cooling. The so-called “lock-in effect,” in which homeowners are reluctant to sell because they hold low-rate mortgages, is also easing and helping to boost inventory.

Data from S&P Cotality Case-Shiller on Tuesday showed that buyers are gaining leverage over sellers. A national gauge of home prices rose 1.5% in August from a year earlier, the smallest annual gain since mid-2023.

By region, contract signings for previously owned homes climbed 1.1% in the South — the highest since March — and also rose in the Northeast, while falling in the West and Midwest.

The broader housing market has seen renewed momentum recently, with new-home sales jumping in August to the highest level since 2022. While some economists attributed the sharp gain to normal monthly volatility, homebuilders have been using price cuts and incentives to spur demand.

Pending home sales typically serve as a leading indicator for existing-home closings, as contracts are usually signed one to two months before final sales.

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6. Federal Reserve to End Balance Sheet Reduction in December

The Federal Reserve said it will halt its balance sheet reduction program in December and cut interest rates by a quarter percentage point in an effort to ease borrowing conditions amid rising concerns about the US labor market.

The decision marks the end of the Fed’s three-year quantitative tightening (QT) campaign, which had raised concerns about disruptions in short-term funding markets and higher bank borrowing costs.

In a statement, the rate-setting Federal Open Market Committee (FOMC) said the New York Fed would “roll over” all of the central bank’s maturing Treasury securities from December 1 into purchases of new bonds and bills.

The Fed will continue allowing $35 billion in government mortgage-backed securities to roll off its balance sheet each month but will reinvest the proceeds into Treasuries.

The central bank’s move to lower its benchmark rate to a range of 3.75% to 4% — as widely expected — brings it to the lowest level since late 2022. The FOMC said “downside risks to employment have risen in recent months.”

The 12 voting members were divided. Kansas City Fed President Jeff Schmid advocated holding rates steady, while Trump ally and Fed Governor Stephen Miran favored a deeper half-point reduction.

Wednesday’s cut marks the second consecutive rate reduction and follows President Donald Trump’s campaign pressuring the Fed to significantly lower borrowing costs.

The Fed had expanded its balance sheet to $9 trillion after the Covid-19 pandemic by purchasing trillions in Treasuries and mortgage-backed securities, flooding the financial system with liquidity. Since 2022, it has gradually allowed those assets to mature without replacement as part of its tightening strategy.

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7. Alphabet Reports Quarterly Sales Above Estimates

Alphabet Inc. reported quarterly revenue that beat analysts’ expectations, powered by strong growth in its cloud business as artificial intelligence startups increasingly rely on Google’s computing infrastructure and expertise.

Shares jumped as much as 7.5% in after-hours trading.

Third-quarter sales, excluding partner payouts, rose to $87.5 billion, the company said Wednesday — topping the $85.1 billion average estimate of analysts surveyed by Bloomberg. Net income came in at $2.87 per share, versus Wall Street’s forecast of $2.26.

Alphabet is investing record sums to accelerate progress in artificial intelligence, embedding its large language model, Gemini, into core products such as Search to enhance user assistance and responsiveness. The company raised its full-year capital expenditure forecast to a range of $91 billion to $93 billion, up from an earlier estimate of $85 billion.

Investors are watching closely to see whether Google’s heavy AI spending will translate into business momentum, particularly in its cloud division and search advertising operations. The company says such investments in infrastructure, research, and talent are essential to compete with major cloud rivals like Amazon.com Inc. and Microsoft Corp.

Alphabet’s shares gained 2.7% to close at $274.57 in regular trading Wednesday and have climbed 45% so far this year.

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