Stock market investors this week will be looking for cues from the United States Federal Reserve (US Fed) meeting, which is expected to lead to a rate cut. On the domestic front, investors will be drawing inspiration from the earnings reports of two Philippine Stock Exchange index (PSEi) heavyweights.

“Global markets lean dovish ahead of the Oct. 28 to 29 Federal Open Market Committee (FOMC), where a rate cut now stands as the clear baseline,” said online brokerage firm 2TradeAsia.com.

It noted that “this paves the way for a December follow-through that could sustain the easing cycle into early 2026 if inflation prints continue to cooperate.”

The brokerage explained that this dovetailing with global disinflation should embolden emerging market (EM) risk appetite, channeling fresh capital toward high-yield currencies and equities starved for yield compression.

However, 2TradeAsia.com warned that the optimism should be balanced against short-run events, such as the Donald Trump-Xi Jinping summit in South Korea next week, which looms as a wildcard for supply chain in technology and automotive, potentially reigniting protectionist headwinds that cascade into broader sentiment erosion.

“Also, the federal shutdown’s drag, grinding into its third week, threatens to hobble fiscal stimulus and amplify downside surprises in US growth data. These may cap any post-Fed euphoria heading into November,” it said.

Meanwhile, to kick off the four-day PSEi trading week, BDO Unibank Inc. and Manila Electric Co. (Meralco) will be disclosing their respective performances for the third quarter and first nine months of 2025 on Monday, Oct. 27. There will be no trading on Friday, Oct. 31—the eve of All Saints’ Day, Nov. 1.

2TradeAsia.com advises investors to remain leaning into rate-sensitive stocks as global risk assets unstick credit growth and unlock valuation reratings long suppressed by tight policy.

“Local trades seem more locked to defensive yields in the long-term and speculative, story-specific plays in the short-term; with year-end seasonality aligning behind global rate cuts, the path of least resistance points to PSEi upside consolidation, rewarding patient accumulators who layer in on pullbacks,” it noted.

For stock picks, Abacus Securities Corp. is recommending Puregold Price Club as its earnings are seen to pick up due to higher consumer spending as a result of low inflation and the recent wage hike.

“With those factors, we expect third-quarter 2025 to be a mid-to-high single-digit same-store sales growth improvement with our confidence tilted more to the middle end and that the company will continue to outpace its peers,” the brokerage said.

It added that, “Another reason to like the stock ahead of the release of third-quarter earnings, and even going into 2026, is the drop in shipping costs from Los Angeles to Shanghai.

“As we know, S&R imports its inventory largely from the US and much of it probably goes through the said route....the average rate to ship a 40-foot container was 20-percent lower year-on-year in the second quarter, which is what’s relevant for third-quarter selling costs, and 45-percent lower year-on-year for the third quarter, which would then be great for fourth-quarter margins,” Abacus said.