The S&P 500 Index ($SPX) (SPY) today is up +1.18%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.97%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.52%. December E-mini S&P futures (ESZ25) are up +1.12%, and December E-mini Nasdaq futures (NQZ25) are up +1.48%.
Stock indexes are sharply higher today as they recover some of the losses from last Friday’s plunge. Asset markets are rebounding today after the Trump administration softened its rhetoric toward China. Chipmakers and AI infrastructure stocks are also rallying today, led by a +10% jump in Broadcom after OpenAI signed a multiyear agreement with the company to collaborate on custom chips and networking equipment, which could add 10 gigawatts’ worth of AI data center capacity.
There is no trading in cash Treasuries today due to the Columbus Day holiday. The price of gold is up more than +2% today and has posted a new all-time high due to central bank buying, expectations for additional Fed rate cuts, and safe-haven demand from the US government shutdown, threats to the Fed’s independence, global trade tensions, and geopolitical risks.
The Trump administration signaled openness on Sunday to a trade deal with China in an attempt to ease trade tensions. Stocks plunged last Friday after President Trump threatened 100% tariffs on Chinese goods and restrictions on US software exports, effective November 1, in retaliation for China’s sweeping new curbs on exports of rare-earth materials and related technology.
Trade news from China was better than expected, a positive sign for global economic growth and a bullish factor for the stock market. China Sep exports rose +8.3% y/y, stronger than expectations of +6.6% y/y and the biggest increase in six months. Also, Sep imports rose +6.4% y/y, stronger than expectations of +1.8% y/y and the largest increase in 17 months.
Most stock indexes rallied to record highs last week on optimism that growth in the AI sector and spending on artificial intelligence will translate into corporate profits. Stocks are also underpinned by hopes that a resilient US economy and additional Fed easing will continue to support the economy.
The shutdown of the US government continues, weighing on market sentiment and delaying key economic reports. The government shutdown means delays in the release of government reports, including the last two weeks of weekly initial unemployment claims, the Aug US trade report, and the Sep nonfarm payrolls report. Last Friday, the Bureau of Labor Statistics (BLS) said that it will release the September consumer price report on October 24 if the government shutdown continues into Wednesday, when the Sep CPI report is scheduled for release. The White House has warned that if the government shutdown lingered, it would trigger widespread dismissals of employees in government programs that don’t align with President Trump’s priorities. Bloomberg Economics estimates that 640,000 federal workers will be furloughed during the shutdown, which would expand jobless claims and push the unemployment rate up to 4.7%.
The markets this week will focus on trade or tariff news and any attempts to reopen the government. On Tuesday, Fed Chair Powell delivers the keynote address at the NABE Annual Meeting. Also on Tuesday, major banks, including JPMorgan Chase, Goldman Sachs, Citigroup, and Wells Fargo & Co., will begin releasing their earnings results as the Q3 earnings season begins.
Rising corporate earnings expectations are a bullish backdrop for stocks. According to Bloomberg Intelligence, more than 22% of companies in the S&P 500 provided guidance for their Q3 earnings results that are expected to beat analysts’ expectations, the highest in a year. However, Q3 profits are expected to have risen by +7.2%, the smallest increase in two years. Also, Q3 sales growth is projected to slow to +5.9% from 6.4% in Q2.
The markets are pricing in a 99% chance of a -25 bp rate cut at the next FOMC meeting on Oct 28-29.
Overseas stock markets today are mixed. The Euro Stoxx 50 is up +0.33%. China’s Shanghai Composite fell to a 2.5-week low and closed down -0.19%. Japan’s Nikkei Stock 225 did not trade as markets in Japan are closed for the Health-Sports Day holiday.
Interest Rates
December 10-year T-notes (ZNZ5) today are down -5 ticks. Cash 10-year T-notes are not trading today, with the Treasury market closed for the Columbus Day holiday. Dec -T-notes are under pressure today from a sharp rebound in stocks, which curbs safe-haven demand for government debt securities. Losses in Dec T-notes are limited amid concerns about the ongoing US government shutdown, which could lead to additional job losses, reduced consumer spending, and a weakened US economy, potentially allowing the Fed to continue cutting interest rates.
European government bond yields are moving lower today. The 10-year German bund yield fell to a 2-month low of 2.622% and is down -1.0 bp at 2.634%. The 10-year UK gilt yield fell to a 3-week low of 4.644% and is down -0.2 bp to 4.672%.
The German Sep wholesale price index rose +1.2% y/y, the fastest pace in six months.
Swaps are discounting a 2% chance for a -25 bp rate cut by the ECB at its next policy meeting on October 30.
US Stock Movers
Chipmakers are sharply higher today, boosting the overall market. Broadcom (AVGO) is up more than +10% to lead gainers in the S&P 500 and Nasdaq 100 after OpenAI signed a multiyear agreement with the company to collaborate on custom chips and networking equipment. Also, ON Semiconductor (ON) is up more than +6%, and Microchip Technology (MCHP) and ARM Holdings Plc (ARM) are up more than +5%. In addition, Micron Technology (MU), Lam Research (LRCX), and KLA Corp (KLAC) are up more than +4%, and Applied Materials (AMAT), ASML Holding NV (ASML), Qualcomm (QCOM), and NXP Semiconductors NV (NXPI) are up more than +3%. Finally, Analog Devices (ADI) and Marvell Technology (MRVL) are up more than +2%.
The Magnificent Seven technology stocks are moving higher today as they recover some of last Friday’s plunge. Nvidia (NVDA) and Tesla (TSLA) are up more than +2%. Also, Amazon.com (AMZN) and Alphabet (GOOGL) are up more than +1%. In addition, Apple (AAPL) is up +0.76%, Meta Platforms (META) is up more +0.68%, and Microsoft (MSFT) is up +0.36%.
Rare earth stocks are surging today as fresh tensions between China and the US over China’s exports of the minerals are boosting alternative suppliers. As a result, Critical Metals (CRML) is up more than +39%, MP Materials (MP) is up more than +25%, and Ramaco Resources (METC) is up more than +11%.
Mining stocks are rising today, with the price of gold up more than +2% to an all-time high and silver prices up more than +5%. As a result, Coeur Mining (CDE) is up more than +8%. Also, Newmont (NEM), Freeport-McMoRan (FCX), and Anglogold Ashanti Plc (AU) are up more than +3%.
Estee Lauder (EL) is up more than +4% after Goldman Sachs upgraded the stock to buy from neutral with a price target of $115.
Warner Bros Discovery (WBD) is up more than +4% after rejecting Paramount Skydance Corp’s initial takeover offer as too low.
Ciena Corp (CIEN) is up more than +4% after BNP Paribas Exane upgraded the stock to outperform from neutral with a price target of $185.
Stubhub Holdings (STUB) is up more than +4% after Wedbush initiated coverage on the stock with a recommendation of outperform and a price target of $25.
Tvardi Therapeutics (TVRD) is down sharply by more than -84% after a Phase 2 trial of its TI-101 to treat idiopathic pulmonary fibrosis failed to meet its goals.
Fastenal (FAST) is down more than -6% to lead losers in the S&P 500 and Nasdaq 100 after reporting Q3 EPS of 29 cents, below the consensus of 30 cents.
US casino stocks with exposure to Macau are sliding today after Macau industry data showed gaming revenue for the Golden Week holiday was down -5% y/y. As a result, Las Vegas Sands (LVS) is down more than -5% and Wynn Resorts Ltd (WYNN) is down more than -4%.
Defensive food producers and beverage makers are declining today as the broader market rebounds. Hershey (HSY), Conagra Brands (CAG), J M Smucker (SJM), and Monster Beverage (MNST) are down more than -2%.
PayPal Holdings (PYPL) is down more than -2% after Goldman Sachs downgraded the stock to sell form neutral with a price target of $70.
Baldwin Insurance Group (BWIN) is down more than -1% after BMO Capital Markets downgraded the stock to market perform from outperform.
Earnings Reports(10/13/2025)
Fastenal Co (FAST), Lionsgate Studios Corp (LION).
