Weekly Wrap

The stock market staged a solid rebound from last week’s selloff, with broad gains across nearly every sector. The S&P 500 (+1.7%), Nasdaq Composite (+2.1%), and Dow Jones Industrial Average (+1.6%) all advanced, while smaller-cap indices also participated — the Russell 2000 gained 2.4% and the S&P MidCap 400 rose 2.0%.

Renewed momentum in AI and tech stocks helped drive the gains. The PHLX Semiconductor Index jumped 5.8% for the week, while Alphabet (GOOG) and Meta Platforms (META) lifted the communication services sector (+3.6%) to the top of the leaderboard. The real estate sector (+3.4%) also outperformed as long-term Treasury yields eased, and the information technology sector (+2.1%) contributed to the market’s growth-oriented tone.

The financials sector was the only sector to finish the week flat, as renewed pressure on regional banks overshadowed otherwise upbeat earnings results from several major lenders. The SPDR S&P Regional Banking ETF (KRE) sank 3.5% for the week, weighed down by lingering concerns around credit quality and liquidity, which offset the sector’s early-week optimism.

The market’s rebound was supported by easing rate expectations and resilient corporate results, helping investors regain confidence after last week’s macro-driven setback. Though the major averages remain below record levels, the week’s action reaffirmed the market’s underlying strength, with growth and semiconductor names once again at the forefront of leadership.

• Russell 2000: +2.4% WTD
• Nasdaq Composite: +2.1% WTD
• S&P MidCap 400: +2.0% WTD
• S&P 500: +1.7% WTD
• DJIA: +1.6% WTD

Monday:

The S&P 500 (+1.6%), Nasdaq Composite (+2.2%), and DJIA (+1.3%) recovered roughly half of Friday's losses as the market staged a broad-based advance amid easing trade tensions between the U.S. and China.

The rebound was fueled by remarks from President Trump, who sought to calm concerns after previously threatening a 100% tariff rate on Chinese imports in response to tightened rare earth export controls, saying on Truth Social, "Don't worry about China, it will all be fine!" Treasury Secretary Scott Bessent added to the optimism, telling Fox Business that the U.S. and China were in contact over the weekend and that he still expects President Trump to meet with Chinese President Xi in the near future.

The improvement in sentiment lifted smaller-cap indices as well, with the Russell 2000 (+2.8%) and S&P Mid Cap 400 (+2.0%) outperforming as the market released its defensive posture from Friday. 

Nine S&P 500 sectors finished in positive territory, with some of Friday's laggards driving the index-level advance today. 

The information technology sector (+2.5%) led the way, supported by strength in its chipmaker names that pushed the PHLX Semiconductor Index to a 4.9% gain. 

Broadcom (AVGO 356.70, +32.07, +9.88%) benefitted from what was arguably the most notable stock-specific headline today, trading sharply higher after announcing the company will collaborate with OpenAI on 10 gigawatts of custom AI accelerators. 

NVIDIA (NVDA 188.31, +5.15, +2.81%) also captured a solid gain after announcing that Meta Platforms (META 715.70, +10.40, +1.47%) and Oracle (ORCL 308.01, +15.05, +5.14%) will use NVIDIA Spectrum-X Ethernet networking switches to boost their AI data center networks, though the announcement weighed on Arista Networks (ANET 147.45, -6.65, -4.32%).

Strength across mega-cap names also pushed the consumer discretionary (+2.3%) and communication services (+1.8%) sectors higher, with Tesla (TSLA 435.90, +22.41, +5.42%) leading the "magnificent seven" group. The Vanguard Mega Cap Growth ETF gained 1.9% today, helping the market-weighted S&P 500 (+1.6%) outperform the S&P 500 Equal Weighted Index (+1.0%). 

While the financials sector (+0.9%) finished in the middle of the pack today, several major banking names, such as Goldman Sachs (GS 786.78, +22.42, +2.93%), JPMorgan Chase (JPM 307.97, +7.08, +2.35%), and Citigroup (C 96.10, +2.17, +2.31%), traded higher ahead of their earnings reports tomorrow morning, which will serve as an early barometer of Q3 earnings strength. 

Other strong performances today came from retail names that rely on Chinese imports, such as Best Buy (BBY 77.46, +7.02, +9.97%), Burlington Stores (BURL 276.23, +21.71, +8.53%), and Ross Stores (ROST 154.77, +7.06, +4.78%).

Quantum computing names surged today after IonQ (IONQ 82.11, +11.46, +16.22%) soared to new record highs after announcing a significant advancement in quantum chemistry simulations this morning.  The industry also benefitted from JPMorgan Chase's announcement that the company will make significant investments in companies that it deems crucial to U.S. interests, including quantum computing names. 

Weakness was limited to the consumer staples sector (-0.4%), which traded higher during Friday's retreat, and the health care sector (-0.1%), which faced an outsized loss in its largest component, Eli Lilly (LLY 819.11, -14.38, -1.73%). 

Elsewhere, Fastenal (FAST 42.33, -3.45, -7.54%) was the worst-performing S&P 500 name today after missing EPS expectations by $0.01. 

Today's advance was a near mirror image of Friday's retreat, with gains spanning nearly every corner of the market while small-cap, mega-cap, and semiconductor stocks led the way. The rally was driven by optimism following President Trump's comments assuring a resolution to rising trade tensions with China, but with no economic data releases and the bond market closed for the Columbus Day holiday, there was little to divert attention from the rebound.

With the ongoing government shutdown expected to delay key data releases for the foreseeable future, tomorrow's round of big bank earnings reports will serve as an important early gauge of market sentiment and direction. 

Tuesday:

The stock market mounted an impressive intraday reversal from steep opening losses, with the S&P 500 (-0.2%), Nasdaq Composite (-0.8%), and DJIA (+0.4%) finishing mixed as weakness in tech and mega-cap names weighed against broader strength. 

Futures fell sharply this morning after Reuters reported that China sanctioned five U.S.-linked subsidiaries of South Korea's Hanwha Ocean, reversing yesterday's optimism sparked by President Trump's reassuring remarks about China.

While there were no headline catalysts around the China situation to prompt the comeback, the lack of headlines around the matter left the market free to focus on a variety of other developments today, with a strong "buy the dip" move coming into play. 

Q3 earnings started off on solid footing as a slate of major banks reported earnings before the open. Wells Fargo (WFC 84.56, +5.64, +7.15%) was the top-mover in the S&P 500 today after beating on EPS and revenue expectations, with Citigroup (C 99.84, +3.74, +3.89%) also capturing a solid post-earnings gain. Goldman Sachs (GS 770.76, -16.02, -2.04%) and JPMorgan Chase (JPM 302.08, -5.89, -1.91%) faced some profit-taking after earnings beats of their own, but closed well off their session lows. 

While the financials sector (+1.1%) did not finish with the widest gain today, its move into positive territory from an early loss helped the major averages reverse their downward course. 

The consumer staples sector (+1.7%) did not need to reverse course today, as it traded higher this morning while the rest of the market lagged. Walmart (WMT 107.21, +5.09, +4.98%) captured a nice gain after announcing a partnership with OpenAI, joining a recent wave of collaborations with the company that have lifted several tech names in recent weeks. 

Elsewhere, the industrials (+1.2%), real estate (+1.1%), utilities (+0.9%) and materials (+0.9%) sectors also finished with solid gains. 

The information technology (-1.6%) and consumer discretionary (-0.3%) sectors finished with losses, as some nagging mega-cap weakness pulled the consumer discretionary sector back beneath its flat line late in the session. 

The Vanguard Mega Cap Growth ETF finished with a 0.8% loss, and the S&P 500 Equal Weighted Index (+0.8%) comfortably outpaced the market-weighted S&P 500 (-0.2%). 

NVIDIA (NVDA 180.01, -8.31, -4.41%) was a notable laggard, contributing to a 2.3% retreat in the PHLX Semiconductor Index. 

Separately, the energy sector (-0.1%) finished slightly lower as crude oil futures settled today's session $0.67 lower (-1.1%) at $58.77 per barrel. 

The market also benefited from a decent amount of commentary from Fed officials today, which kept the market's expectations for further easing this year steady. 

Fed Chair Jerome Powell (FOMC voting member) said in a speech today that downside risks to the job market have risen, while Boston Fed President Susan Collins (FOMC voting member) said modest rate cuts are warranted as inflation eases while hiring has weakened. 

The probability of a 25-basis-point rate cut at the October FOMC meeting remained at a sturdy 96.7%, according to the CME FedWatch Tool.

The steadfastness of current rate cut expectations was especially beneficial to smaller-cap names today, as the Russell 2000 (+1.4%) and S&P Mid Cap 400 (+0.9%) both outperformed. 

U.S. Treasuries started the session with some safe-haven support, holding on to the bulk of their overnight gains in a bull steepener trade that was rooted in rate cut optimism. The 2-year note yield settled down four basis points to 3.48%, and the 10-year note yield settled down three basis points to 4.02%. 

Reviewing today's data:

• September NFIB Small Business Optimism 98.8; Prior 100.8

Wednesday: 

The stock market opened to broad-based gains in response to optimism around trade tensions with China, though sector strength deteriorated throughout the day, with the major averages ultimately finishing well off their session highs. 

The tech-heavy Nasdaq Composite (+0.7%) finished with the widest gains as tech and mega-cap stocks put up strong performances, while the S&P 500 (+0.4%) also captured a modest gain, and the DJIA finished flat. Meanwhile, the small-cap Russell 2000 (+1.0%) outperformed, while the S&P Mid Cap 400 (+0.1%) had a flattish performance.

All eleven S&P 500 sectors traded higher for much of the morning after Treasury Secretary Bessent suggested in a press conference that a longer trade truce could be achieved if China delays implementing its restrictions on rare earth exports.

The early gains pushed the major averages back near their record-high levels from last week, though eroding strength saw them dip beneath their flatlines in the early afternoon. 

Although the information technology sector (+0.7%) gave back around half of its early gains, its strength remained key to today's index-level advance, especially after its weakness yesterday limited growth in the major averages despite broader market strength.

The sector was supported by strength in chipmakers after chip-making equipment manufacturer ASML (ASML 1009.81, +26.63, +2.71%) reported strong bookings in its Q3 earnings report this morning. 

Advanced Micro Devices (AMD 238.60, +20.51, +9.40%) was one of the top-performing names in the S&P 500 today, and the PHLX Semiconductor Index closed with a 3.0% gain. 

The communication services sector (+1.0%) also finished higher, as, like chipmakers, several mega-cap names shook off yesterday's retreat. Alphabet (GOOG 251.71, +5.52, +2.24%) and Meta Platforms (META 717.55, +8.90, +1.26%) were among the stocks that pushed the Vanguard Mega Cap Growth ETF (+0.6%) higher, though fading strength in the market's largest names throughout the session saw the S&P 500 Equal Weighted Index (+0.2%) close just slightly lower than the market-weighted S&P 500 (+0.4%).

The real estate (+1.5%) and utilities (+1.3%) sectors continued their run of outperformance this week. 

While four S&P 500 sectors ultimately closed lower, only the materials (-0.5%) and industrials (-0.5%) sectors retreated more than 0.1%. 

The industrials sector faced pressure in its defense names after Treasury Secretary Scott Bessent suggested that the Trump administration may ask defense contractors to scale back stock buybacks in favor of increased research and development spending to support national security.

The iShares U.S. Aerospace and Defense ETF retreated 1.5%. 

On the earnings front, the market faced a busy slate of reports, and mixed reactions to several names in the financials sector (-0.1%) left the sector hovering near its flatline by the close. 

Morgan Stanley (MS 162.65, +7.31, +4.71%) and Bank of America (BAC 52.28, +2.19, +4.37%) captured solid gains in response to their earnings beats, while PNC (PNC 182.34, -7.39, -3.90%) faced pressure due to downside guidance and Progressive (PGR 226.50, -13.90, -5.78%) slipped on an earnings miss. 

Macro developments were relatively thin today, though the market remains vulnerable to volatility in response to trade tensions with China. 

The Fed's October Beige Book showed that overall economic activity was little changed from the previous period, which in turn had little effect on the major averages. 

Rate cut expectations remain high, and the government remains shut down, leaving investors focused mostly on corporate earnings and trade headlines for direction. Despite the retreat from earlier highs, the market's resilience in the face of recent pullbacks shows that risk appetite is still holding up, though the recent intraday swings suggest a more cautious tone underneath the surface.

U.S. Treasuries finished Wednesday with losses across the curve after reversing from their mostly higher start. The 2-year note yield settled up two basis points to 3.50%, and the 10-year note yield settled up two basis points to 4.05%. 

Reviewing today's data:

• The Empire State Manufacturing survey rose to 10.7 in October (Briefing.com consensus -1.8) from -8.7 in September.
• The weekly MBA Mortgage Index fell 1.8% to follow last week's 4.7% decrease. The Purchase Index was down 2.7% while the Refinance Index fell 1.0%.
• The Federal Reserve's Beige Book for October showed little overall change in economic activity since the last report. Consumer spending softened a touch while demand for leisure and hospitality from foreign tourists continued weakening. Wealthier individuals continued spending on luxury travel and accommodations. Manufacturing activity varied with some contacts reporting challenges from tariffs and falling demand. Employment was little changed while prices continued climbing.

Thursday: 

A brief and modest early rally around AI enthusiasm quickly faded into a broad market retreat just before midday, with the S&P 500 (-0.6%), Nasdaq Composite (-0.5%), and DJIA (-0.7%) trading progressively lower throughout the session. The small-cap Russell 2000 (-2.1%) and S&P Mid Cap 400 (-1.2%) lagged as the market displayed a risk-off disposition, resulting in some safe-haven demand in U.S. Treasuries.

For much of the morning, only the financials sector (-2.8%) traded in negative territory, with the initial weakness concentrated in insurer names after Marsh McLennan (MMC 186.48, -17.37, -8.52%) and Travelers (TRV 261.57, -7.88, -2.92%) traded lower despite beating earnings expectations. 

The sector would weigh heavier on the market after Zions Bancorp (ZION 46.93, -7.10, -13.14%) and Western Alliance Bancorp (WAL 70.32, -8.52, -10.81%) disclosed that they were victims of fraud involving loans tied to funds that invest in distressed commercial real estate, according to Bloomberg. Zions Bancorp disclosed a $50 million charge-off for one of the loans, which will be reflected on the company's Q3 earnings statement.

The KBW Regional Bank ETF slid 6.3% in response.

The scandal adds to a growing list of recent missteps that have prompted credit quality concerns across the industry, including Jefferies' (JEF 48.80, -5.80, -10.62%) exposure to the recently bankrupt First Brands and JPMorgan Chase (JPM 298.54, -7.15, -2.34%) and Fifth Third's (FITB 40.36, -2.56, -5.96%) exposure to the bankrupt Tricolor Auto.

Eroded confidence in the broader market ultimately saw ten S&P 500 sectors close with losses. 

Only the information technology sector (+0.1%) closed with a slight gain, led by strength in chipmakers after Taiwan Semiconductor Manufacturing (TSM 300.00, -4.71, -1.55%) reported strong AI demand in its Q3 earnings report. The PHLX Semiconductor Index (+0.5%) closed with a modest gain after retreating beneath its flatline. 

Despite the slight advance, the sector also held one of the worst-performing names in the S&P 500 amid a day ripe with laggards. F5 Networks (FFIV 295.35, -35.40, -10.70%) traded sharply lower after Bloomberg reported that the company's flagship BIG-IP product was breached by state-backed Chinese hackers.

Other notable laggards today included United Airlines (UAL 98.19, -5.86, -5.63%), which traded lower despite an earnings beat. CEO Scott Kirby said the federal government shutdown could hurt bookings if it continues, according to CNBC.

Kenvue (KVUE 14.11, -2.15, -13.22%) crashed to all-time lows on reports that the company is facing new litigation in the United Kingdom related to talc-based products, which the suit alleges are related to ovarian cancer claims.

The energy sector (-1.1%) also lagged as crude oil futures settled today's session $1.25 lower (-2.1%) at $57.03 per barrel. Reuters reported that the U.S and India had productive talks and Indian refiners are already lowering Russian imports by 50%. 

President Trump and Russian President Putin spoke on the phone today, with President Trump describing the conversation as "very productive" and announcing that he will meet with the Russian president in Hungary to discuss the war in Ukraine soon. 

There were relatively few developments regarding the recent trade tensions with China throughout the session, though President Trump described the situation as a trade war yesterday evening. 

Mounting geopolitical uncertainty, credit quality concerns across the banking industry, and a handful of negative corporate headlines culminated in a volatile environment for equities today that saw the CBOE Volatility Index surge over 20%. 

While stocks largely retreated throughout the session, U.S. Treasuries saw some safe-haven interest, with relative strength up front sending the 2-year yield to its lowest level since August 2022. The 2-year note yield settled down seven basis points to 3.43%, and the 10-year note yield settled down seven basis points to 3.98%. 

Reviewing today's data:

• The Philadelphia Fed survey fell to -12.8 in October (Briefing.com consensus 9.1) from 23.2 in September.
• The NAHB Housing Market Index rose to 37 in October (Briefing.com consensus 33) from 32 in September.
• The Treasury Budget for September showed a surplus of $198.0 billion compared to a surplus of $80.3 billion in the same period a year ago. That is the largest monthly surplus since April 2025. The September surplus resulted from receipts ($544.0 billion) exceeding outlays ($346.0 billion). The Treasury Budget data are not seasonally adjusted, so the September surplus cannot be compared to the August deficit of $344.8 bln.
  • The key takeaway from the report is that the FY25 deficit was less than the FY24 deficit. That is the good news. The bad news is that the FY25 deficit was still $1.775 trillion, even with the collection of $195 billion in customs duties (for tariffs).

Friday:

The stock market recovered from some early instability as broad strength pushed the S&P 500 (+0.5%), Nasdaq Composite (+0.5%), and DJIA (+0.5%) higher, cementing solid week-to-date gains. 

While many sectors spent the morning flipping between positive and negative territory, nine S&P 500 sectors ultimately finished with gains. 

The consumer staples sector (+1.2%) led the way, supported by nearly all of its components trading higher and Kenvue (KVUE 15.29, +1.18, +8.36%) capturing the widest gains across S&P 500 names today, recovering over half of yesterday's losses that came after reports the company will face litigation in the U.K. for alleged links between its talc-based products and ovarian cancer. 

The financials sector (+0.8%) also outperformed as it shook off some of yesterday's weakness. Regional banking names faced significant losses after Zions Bancorp (ZION 49.67, +2.74, +5.84%) disclosed $50 million in charge-offs linked to fraudulent loans, adding to recent lending and liquidity concerns throughout the industry. Many of those names rebounded at least slightly today, with the KBW Regional Bank ETF (KRE 59.08, +0.94, +1.61%) recovering a chunk of yesterday's retreat. 

Support came from a slate of banking names that beat earnings expectations, including Truist (TFC 42.60, +1.51, +3.67%), Comerica (CMA 74.92, +1.07, +1.45%), and Fifth Third (FITB 40.89, +0.53, +1.31%).

Creditor names also traded higher as industry leader American Express (AXP 346.62, +23.50, +7.27%) reported another earnings beat and raised the low end of its FY25 EPS and revenue guidance. 

While the information technology sector (+0.4%) finished near the bottom of the standings, its move into positive territory was pivotal to the stabilization of the major averages. Weakness among semiconductor names saw the PHLX Semiconductor Index close 0.3% lower (which was well above its session lows).

Oracle (ORCL 291.45, -21.55, -6.88%) also faced a steep loss after the company's AI World Conference, with investors seemingly focused on commentary that the company is willing to accelerate investments in the near term, potentially pressuring margins and near-term earnings. 

Despite the various pressures the sector faced, its three largest components, NVIDIA (NVDA 183.22, +1.41, +0.78%), Microsoft (MSFT 513.58, +1.97, +0.39%), and Apple (AAPL 252.29, +4.84, +1.96%), all closed with gains.

Only the materials (-0.4%) and utilities (-0.4%) sectors finished lower. 

Macro developments were quieter today. Treasury Secretary Scott Bessent will discuss trade with the Chinese Vice Premier He Lifeng this evening, and President Trump is still reportedly set to meet with Chinese President Xi over the coming weeks. 

The government remains shut down, which prevented the release of any economic data today. Rate cut expectations remain high ahead of next week's delayed release of the September Consumer Price Index. 

U.S. Treasuries finished the week on a lower note, lifting yields on longer tenors off their lowest levels since April while the 2-year yield climbed off its lowest level in over three years. The 2-year note yield settled up three basis points to 3.46%, and the 10-year note yield settled up three basis points to 4.01%.