Weekly Wrap

Stocks saw strong early-week gains on optimism around U.S.-China trade developments and mega-cap earnings, sending the major averages to record-highs for the first three days of the week, though the major averages ended the week on a mixed note. The Nasdaq Composite (+2.2% WTD), S&P 500 (+0.7% WTD), and DJIA (+0.8% WTD) captured weekly gains, while smaller-cap indices lagged, with the Russell 2000 (-1.4% WTD) and S&P MidCap 400 (-1.6% WTD) finishing lower. Early-week momentum was fueled by a U.S.-China trade deal framework and strong tech leadership.

Earnings were a major driver of sentiment. Amazon and Alphabet posted strong results, while NVIDIA’s conference announcements—including over $500 billion in chip orders through 2026—supported tech gains. Meta’s report midweek weighed on sentiment due to higher AI spending plans.

Sector performance reflected the mega-cap leadership as the information technology (+3.0% WTD) and consumer discretionary (+2.8%) sectors led, while the consumer staples (-3.7%), real estate (-3.9%), and utilities (-2.6%) sectors lagged.

The FOMC went through with a widely expected 25-basis point rate cut, though Fed Chair Powell’s post-FOMC comments dampened December rate-cut expectations, pushing the probability down to roughly 65%. Nonetheless, strong earnings, a booming AI investment cycle, and trade optimism helped maintain a broadly positive tone for the week.

• Nasdaq Composite +2.2% WTD
• DJIA +0.8% WTD
• S&P 500 +0.7% WTD
• Russell 2000 -1.4% WTD
• S&P MidCap 400 -1.6% WTD

Monday:

The stock market expanded upon last week's momentum, sending the S&P 500 (+1.2%), Nasdaq Composite (+1.9%), and DJIA (+0.7%) to fresh record highs as mega-cap names led a broad-based advance. 

Reports emerged over the weekend that the U.S. and China agreed to a trade deal framework that will avoid an additional 100% tariff on Chinese imports, with President Trump and Chinese President Xi set to finalize the deal on Thursday, according to The Washington Post. 

Treasury Secretary Scott Bessent told CBS News that he expects the deal to include a "substantial" purchase of U.S. soybeans, a delay in rare earth export controls, and a resolution of differences regarding the TikTok deal.

The developments signal a markedly more conciliatory tone from both sides, a far cry from just a few weeks ago when President Trump described the situation as a trade war. 

Stocks moved higher in response, with sector strength improving throughout the day, ultimately seeing nine S&P 500 sectors close with gains. 

Mega-cap names drove the advance, buoying the communication services (+2.3%), information technology (+2.0%), and consumer discretionary (+1.5%) sectors to significant gains, while no other sectors captured a gain wider than 0.6%.

Alphabet (GOOG 269.93, +9.42, +3.62%), which reports its earnings Wednesday after the close, provided strong leadership for the communication services sector, notching a fresh record high. Meta Platforms (META 750.82, +12.46, +1.69%) captured a solid gain ahead of its earnings that also fall on Wednesday afternoon. 

The top-weighted information technology sector saw all of its mega-cap components finish with gains of 1.5% or wider. NVIDIA (NVDA 191.49, +5.23, +2.81%) was a top mover after Treasury Secretary Scott Bessent told CBS News that there will be no changes to U.S. export controls on chips.

The stock was unaffected by Qualcomm's (QCOM 187.68, +18.74, +11.09%) unveiling of its new AI200 and AI250 accelerator chips, marking a major push into the high-performance AI infrastructure market dominated by NVIDIA. 

Advanced Micro Devices (AMD 259.70, +6.78, +2.68%), which is another leader in the space, briefly dipped below its flat line, though it quickly rebounded after Reuters reported the company and the U.S. Department of Energy have partnered to build two supercomputers.

The PHLX Semiconductor Index finished with a 2.7% gain. 

Elsewhere, Tesla (TSLA 452.42, +18.70, +4.31%) rebounded from a 3.4% slide on Friday, providing strong leadership for the consumer discretionary sector. 

The Vanguard Mega Cap Growth ETF closed 1.9% higher, as all of the "magnificent seven" names closed at least 1.2% higher. Five of those seven companies will report earnings later this week. 

As a result, the market-weighted S&P 500 (+1.2%) considerably outperformed the S&P 500 Equal Weighted Index (+0.5%). 

Meanwhile, the consumer staples sector (-0.3%) lagged despite Keurig Dr Pepper (KDP 29.23, +2.07, +7.62%) moving higher after posting a strong Q3 earnings report and raising its FY25 outlook.

The materials sector (-0.3%) also finished in negative territory. Albemarle (ALB 96.21, -9.43, -8.93%) was the worst-performing S&P 500 name after the company announced it will sell a controlling stake in Ketjen Corporation's refining catalyst solutions business to KPS Capital Partners. 

Newmont Corporation (NEM 78.60, -4.77, -5.73%) faced pressure as gold and silver deepened their reversals from record highs, returning to levels from early October. 

Outside of the S&P 500, the small-cap Russell 2000 (+0.3%) notched record highs of its own despite a sharp reversal from its opening gains. The S&P Mid Cap 400 (+0.3%) followed a similar trajectory and captured a similar gain. 

Momentum across the mega-caps ahead of their earnings underscores their outsized influence on index-level performance. Should results top expectations, the market could be set for a continued climb into record territory, supported by improving U.S.-China trade relations and the prospect of additional policy easing beginning with Wednesday's FOMC meeting.

U.S. Treasuries began the week in mixed fashion, as the long bond recorded a slim gain after overcoming some early pressure while shorter tenors finished with slight losses. The 2-year note yield settled up two basis points to 3.50%, and the 10-year note yield settled unchanged at 4.00%. 

Tuesday:

The S&P 500 (+0.2%), Nasdaq Composite (+0.8%), and DJIA (+0.3%) notched fresh record highs today amid a mega-cap rally, with NVIDIA (NVDA 201.03, +9.54, +4.98%) leading the advance as the market was struck with a wave of developments that came out of the company's GPU Technology Conference. 

NVIDIA captured a record high of its own, rising past the $200 mark for the first time since its stock split. Importantly, CEO Jensen Huang said that the company has over $500 billion in orders through 2026 for its Blackwell and early Rubin chips. Mr. Huang also stated that the Blackwell chips are now being manufactured in Arizona. 

Today's surge in NVIDIA's strength brought a number of companies with it. 

Nokia (NOK 7.77, +1.41, +22.17%) traded sharply higher after NVIDIA announced it will take a $1 billion equity stake in the company. The two companies will also collaborate to launch AI-native 5G-Advanced and 6G networks on NVIDIA platforms. 

Super Micro Computer (SMCI 52.36, +0.79, +1.53%), CrowdStrike (CRWD 546.94, +17.24, +3.25%), and Palantir Technologies (PLTR 189.60, +0.42, +0.22%) were among the other names that traded higher after mentions at the conference.

Unsurprisingly, the information technology sector (+1.6%) led today's advance. Microsoft (MSFT 542.07, +10.55, +1.98%) also captured a solid gain after announcing the plans for its continued partnership with OpenAI. 

NVIDIA's impressive strength was not ubiquitous across other chipmaker names, as the PHLX Semiconductor Index captured a rather modest 0.4% gain. 

Mega-cap strength was, however, more consistent today. The consumer discretionary sector (+0.3%) finished with a gain due to strength in Tesla (TSLA 460.55, +8.13, +1.80%) and Amazon (AMZN 229.25, +2.28, +1.00%). 

The Vanguard Mega-Cap Growth ETF gained 0.9% today, and the market-weighted S&P 500 (+0.2%) decidedly outpaced the S&P 500 Equal Weighted Index (-0.9%). 

Outside of the mega-cap realm, the materials sector (+0.1%) was the only other S&P 500 sector to finish higher. The sector was supported by strong performances from Sherwin-Williams (SHW 354.57, +18.49, +5.50%) and Nucor (NUE 152.04, +7.88, +5.47%) after beating earnings expectations. 

Eight S&P 500 sectors finished in negative territory, with the real estate sector (-2.2%) slipping the furthest, as shares of Alexandria RE (ARE 62.95, -14.92, -19.16%) fell after an earnings miss. 

The utilities (-1.7%), energy (-1.1%), and consumer staples (-1.0%) sectors also incurred fairly wide losses. 

Smaller-cap indices also faced pressure today, with the Russell 2000 (-0.6%) and S&P Mid Cap 400 (-0.9%) closing well beneath their baselines. 

Ultimately today's advance was underpinned by the strength of a few of the market's largest names, and in particular, its largest. While NVIDIA's rally boosted the major averages, the majority of stocks saw some profit-taking after yesterday's broad-based advance. However, the market displayed conviction in the AI trade today, which bodes well for a host of other mega-cap names set to start reporting earnings tomorrow after the close.

Additionally, tomorrow's FOMC decision is widely expected to bring forth another 25-basis point rate cut, which could help stimulate growth in pockets of the market that lagged today. 

U.S. Treasuries recorded slight gains on Tuesday after spending the session in a sideways range that narrowed as the day went on. The 2-year note yield settled down one basis point at 3.49%, and the 10-year note yield settled down one basis point to 3.98%.

Reviewing today's data:

• The Conference Board's Consumer Confidence Index slipped to 94.6 in October (Briefing.com consensus 94.2) from an upwardly revised 95.6 (from 94.2) in September. In the same period a year ago, the index stood at 109.6.
  • The key takeaway from the report is that there wasn't much change in consumer confidence in October, as a small uptick in views about the present situation was offset by a small drop in views about the outlook.
• The FHFA Housing Price Index was up 0.4% month-over-month in August (Briefing.com consensus 0.1%) after a revised flat reading (from -0.1%) in July.
• The S&P Case-Shiller Home Price Index was up 1.6% year-over-year in August (Briefing.com consensus 1.9%), down from 1.8% in July.

Wednesday:

The stock market had a rather eventful session, with NVIDIA's (NVDA 207.03, +6.00, +2.98%) rally pushing the S&P 500 (flat), Nasdaq Composite (+0.6%), and DJIA (-0.2%) to record highs shortly after the open. After the market's initial move, the major averages spent much of the session in a sideways drift leading into the FOMC decision this afternoon. 

The decision to cut the federal funds rate by 25 basis points to 3.75%-4.00% was widely expected and had little effect on the major averages. Fed Chair Powell's comments on the path for additional easing, however, prompted a sharp slide. 

In particular, Mr. Powell noted that committee members hold differing views regarding another rate cut at the December meeting, saying, "A further reduction in policy rate in December is not a foregone conclusion, far from it."

The CME FedWatch tool now assigns a 65.9% probability to at least a 25-basis-point rate cut at the December 10 FOMC meeting, down from 90.9% yesterday.

The comments saw several S&P 500 sectors and the major averages move beneath their baselines in response. The tech-heavy Nasdaq Composite rebounded and notched a record closing high, while the S&P 500 and DJIA failed to close above their baselines. 

With much of the morning headline buzz centered around NVIDIA surpassing $5 trillion in market capitalization, it is not surprising that the information technology sector (+1.1%) finished as one of the best-performing S&P 500 sectors. 

NVIDIA's strength also helped the PHLX Semiconductor Index finish 1.9% higher. 

Elsewhere in the sector, Teradyne (TER 173.94, +29.56, +20.47%) and Seagate Tech (STX 265.62, +42.62, +19.11%) captured impressive gains after beating earnings expectations, with Western Digital (WDC 141.38, +16.46, +13.18%) trading higher in sympathy. 

The communications services sector (+1.1%) finished with an identical gain, supported by a solid showing from Alphabet (GOOG 275.17, +6.74, +2.51%), which reports its earnings after the close. 

Mega-caps once again provided an outsized contribution to the major averages, with the market-weighted S&P 500 (flat) decidedly outperforming the S&P 500 Equal Weighted Index (-1.1%). 

Meta Platforms (META 751.67, +0.23, +0.03%) and Microsoft (MSFT 541.55, -0.52, -0.10%) are also set to report earnings after the close. 

Elsewhere, the energy sector (+0.8%) captured a gain as crude oil futures settled today's session $0.30 higher (+0.5%) at $60.46 per barrel. 

The industrials sector (+0.3%) captured a more modest gain, led by Caterpillar (CAT 585.78, +61.31, +11.69%) after a strong earnings beat. 

As for today's laggards, there were some significant losses across the six S&P 500 sectors that retreated. 

The real estate sector (-2.7%) widened its week-to-date loss as all but one of its components traded lower, while the consumer staples sector (-2.0%) saw every one of its constituents finish with a loss. 

Meanwhile, the financials sector (-1.7%) faced pressure from Fiserv (FI 70.73, -55.44, -43.94%) after the company missed earnings expectations and slashed guidance, while an earnings miss from Smurfit Westrock plc (SW 37.84, -5.26, -12.20%) pushed the materials sector (-1.8%) lower. 

Smaller-cap indices were also among today's laggards. The small-cap Russell 2000 (-0.9%) retreated sharply from record-high levels of its own following Fed Chair Powell's somewhat hawkish comments on a December rate cut. The S&P Mid Cap 400 (-0.7%) faced a similar loss.

Ultimately, today's action demonstrated continued momentum in the AI trade and, in particular, the meteoric ascent of the market's largest company, NVIDIA. There were, however, some considerable pockets of weakness in the broader market, with softened expectations for further monetary policy easing providing an additional headwind to overlooked segments. 

U.S. Treasuries also faced pressure in response to the market's reassessment of the Fed's policy path. The 2-year note yield settled up nine basis points to 3.58%, and the 10-year note yield settled up eight basis points to 4.06%.

Reviewing today's data:

• Pending Home Sales were unchanged in September (Briefing.com consensus 1.2%) after increasing 4.2% (revised from 4.0%) in August.
• The weekly MBA Mortgage Index rose 7.1% after decreasing 0.3% a week ago. The Purchase Index was up 4.5% while the Refinance Index rose 9.3%.

Thursday:

The stock market's mega-cap rally finally stalled today, sending the S&P 500 (-1.0%), Nasdaq Composite (-1.6%), and DJIA (-0.2%) lower and snapping this week's perfect streak of fresh record highs.

Meta Platforms (META 666.47, -85.20, -11.33%) was the focal point of weakness after its earnings report yesterday, in which it comfortably bested expectations but saw a substantial $15.9 billion non-cash income tax charge weigh on GAAP EPS and the stock post-earnings.

Perhaps more importantly, the company raised its FY25 spending plans and warned of even heftier AI spending next year, prompting concerns around the profitability, or more specifically, the timeline to profitability of massive AI expenditure. 

That same sentiment did not seem to weigh on Alphabet (GOOG 281.90, +6.73, +2.45%), which traded higher after crushing Q3 earnings expectations.

The company also raised its FY25 capex guidance and expectations for even higher spending in 2026. Investors seemed less worried by Alphabet's spending spree, as Google Cloud revenue jumped 34% to $15.2 billion, with backlog up 46% to $155 billion as AI services drove growth. Management noted more billion-dollar deals in the first nine months of 2025 than the previous two years combined.

Torn between Meta's weakness and Alphabet's strength, the communication services sector (-2.1%) ultimately finished lower. 

Microsoft (MSFT 525.78, -15.77, -2.91%) also moved lower despite an earnings beat of its own, though the company issued just in-line Q2 guidance and reported a smaller upside surprise in Azure revenues than previous quarters.

Elsewhere, the consumer discretionary sector (-2.6%) finished with the widest loss as Tesla's (TSLA 440.10, -21.41, -4.64%) slide pushed it to negative territory for the month, while Amazon (AMZN 222.86, -7.44, -3.23%) traded lower ahead of its earnings this afternoon. The sector faced additional pressure from post-earnings weakness in Chipotle Mexican Grill (CMG 32.52, -7.24, -18.22%) and eBay (EBAY 83.73, -15.81, -15.88%).

Apple (AAPL 271.40, +1.70, +0.63%) also reports this afternoon, though it consistently held a modest gain throughout the session, helping to limit losses in the information technology sector (-1.4%), which moved lower with Microsoft and other top components. NVIDIA (NVDA 202.81, -4.23, -2.04%) was among those names, pulling back from recent record highs and contributing to a 1.5% loss in the PHLX Semiconductor Index. 

The Vanguard Mega Cap Growth ETF (-1.5%) finished with a similar loss, and the S&P 500 Equal Weighted Index (-0.4%) outperformed the market-weighted S&P 500 (-1.0%). 

While the mega-caps lagged from the start, other recently overlooked pockets of the market held considerable gains throughout the day as investors rotated out of tech. The DJIA (-0.2%) held a nice gain for most of the day, nearly eclipsing yesterday's all-time high level before a broader retreat ensued late in the session. 

Three S&P 500 sectors still managed to finish higher, all of which faced significant losses in yesterday's trade. 

The real estate sector (+0.6%) finally caught some buying interest, though the sector still holds a 4.0% loss for the week, while the financials sector (+0.3%) was supported by strength in its major banking names after weakness across the board yesterday. 

The health care sector (+0.2%) also escaped with a gain, supported by its largest component, Eli Lilly (LLY 844.79, +31.26, +3.84%), after an earnings beat, while Moderna (MRNA 28.14, +3.44, +13.93%) made a significant intraday move following speculation of a buyout. Dow component Merck (MRK 86.26, -0.32, -0.37%) faced a modest loss despite beating earnings estimates. 

Outside of the S&P 500, the small-cap Russell 2000 (-0.8%) and S&P Mid Cap 400 (-1.0%) widened their losses that came after Fed Chair Powell's commentary reduced the market's expectations of a December rate cut. 

Despite the stock market retreating today as its largest names lagged, it was not a complete washout trade by any means. After a several-day rally past record highs, the mega-caps were due for a pullback, with any hint of weakness in earnings reports used as a reason to take some money off of the table.

U.S. Treasuries retreated on Thursday, adding to their post-FOMC losses, with longer tenors leading the weakness. The 2-year note yield settled up three basis points to 3.61%, and the 10-year note yield settled up four basis points to 4.09%.

Friday:

The stock market finished its record-setting week on a higher note as Amazon (AMZN 244.22, +21.36, +9.58%) soared past all-time highs while the broader market overcame some intraday sluggishness, ultimately helping the major averages close well off their session lows.

Gains in Amazon and other mega-cap names saw the Nasdaq Composite (+0.6%) advance the furthest, while the S&P 500 (+0.3%) and DJIA (+0.1%) captured more modest gains. 

Amazon rallied after besting earnings expectations yesterday afternoon, with investors particularly enthused by a 20% acceleration in AWS sales growth. Tesley Advisory Group raised its target for the stock to $300 from $265, while Pivotal Research Group raised its target to $300 from $285.

The consumer discretionary sector (+4.1%) was the epicenter of mega-cap strength today, as Tesla (TSLA 456.56, +16.46, +3.74%) also mounted a solid advance. 

While an earnings beat from Apple (AAPL 270.37, -1.03, -0.38%) left investors hoping for another full-blown mega-cap rally, the stock, along with the broader information technology sector (-0.3%), faced some choppiness throughout the day, ultimately finishing modestly lower.

NVIDIA (NVDA 202.49, -0.40, -0.20%) also faced a slight retreat, though the PHLX Semiconductor Index (+0.2%) closed with a gain. 

First Solar (FSLR 266.94, +33.36, +14.28%) and Western Digital (WDC 150.21, +12.08, +8.75%) were among the best-performing S&P 500 names after reporting their earnings. 

Meanwhile, the communication services sector (-0.3%) also faced a loss as Meta Platforms (META 648.35, -18.12, -2.72%) lagged while Alphabet (GOOG 281.82, -0.08, -0.03%) finished flattish. Netflix (NFLX 1118.86, +29.86, +2.74%) captured a nice gain after announcing a 10-for-1 stock split this morning. 

Ultimately, the Vanguard Mega Cap Growth ETF finished 0.3% higher. The S&P 500 Equal Weighted Index (+0.2%) performed similarly to the market-weighted S&P 500 (+0.3%). 

Advancers outpaced decliners by a roughly 4-to-3 ratio on the NYSE and a roughly 7-to-5 pace on the Nasdaq after three consecutive days of negative breadth. 

Five S&P 500 sectors finished with gains, though outside of the communication services sector (+4.1%), they were relatively modest. 

The energy sector (+0.6%) was the only other sector to close with a gain wider than 0.5%, supported by crude oil futures settling today's session $0.39 higher (+0.6%) at $60.95 per barrel. Chevron (CVX 157.64, +4.11, +2.68%) advanced after beating earnings expectations, while Exxon Mobil (XOM 114.36, -0.34, -0.29%) faced a slight retreat after its earnings report. 

Losses were also relatively modest today, as only the materials (-0.9%) and utilities (-0.8%) sectors finished more than 0.5% lower. 

Outside of the S&P 500, the small-cap Russell 2000 (+0.5%) and S&P Mid Cap 400 (+0.6%) outperformed.

On the macro front, the market's expectations for further easing from the Fed this year were dampened by commentary from a handful of officials. 

Kansas City Fed President Jeffrey Schmid (voting FOMC member) said his decision to oppose this week's 25-basis-point rate cut stemmed from inflation remaining above target and market conditions that he viewed as still strong. Dallas Fed President Lorie Logan, who will be a voting member in 2026, echoed similar concerns regarding the October decision and added, "I find it difficult to cut rates again in December unless there is clear evidence that inflation will fall faster than expected or that the labor market will cool more rapidly."

The CME FedWatch tool now assigns a 65.0% probability of at least a 25-basis point rate cut in December, down from 72.8% yesterday and 95.8% one week ago.

Despite the softer rate-cut expectations, Amazon's surge to record highs was enough to warrant a solid ending to a strong week of mega-cap leadership. With mega-cap earnings now in the rearview, the market's largest names are largely in record territory as the AI investment cycle booms, though the broader market has some catching up to do. 

U.S. Treasuries had a quiet finish to October, with yields finishing the month at levels last seen three weeks ago. The 2-year note yield finished unchanged at 3.61% (+13 basis points this week, +1 basis point in October), and the 10-year note yield settled up one basis point to 4.10% (+10 basis points this week, -5 basis points in October). 

Reviewing today's data:

• The Chicago PMI hit 43.8 in October (Briefing.com consensus 42.0), up from 40.6 in September.