Market Overview
Today, the S&P 500 Index ($SPX) (SPY) has increased by +1.01%, while the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.64%. The Nasdaq 100 Index ($IUXX) (QQQ) has seen a rise of +1.40%. Additionally, December E-mini S&P futures (ESZ25) are up +0.95%, and December E-mini Nasdaq futures (NQZ25) are up +1.35%.
Driving Factors
The rise in stock indexes today is fueled by encouraging quarterly earnings reports, fostering a positive mood in equity markets. Semiconductor companies are notably uplifting technology stocks, with ASML Holding experiencing over a +3% increase after exceeding expectations with its Q3 new orders. Furthermore, both Morgan Stanley and Bank of America have reported solid Q3 results, rising over +6% and +5% respectively.
Trade Concerns Easing
Markets extended their gains today as trade tensions with China eased after Treasury Secretary Bessent hinted at the potential for a prolonged truce related to rare earth materials. He also indicated that President Trump is likely to meet with Chinese President Xi Jinping later this month in South Korea.
Federal Reserve Expectations
Market optimism continues with comments from the Federal Reserve suggesting that a rate cut might occur at the upcoming FOMC meeting on October 28-29. The yield on 10-year T-notes dropped to a four-week low of 4.00% after Boston Fed President Susan Collins advocated for further rate cuts this year.
Precious Metals Demand
In light of the escalating trade relations and the ongoing U.S. government shutdown, investors have flocked to precious metals as a safe haven, pushing gold to a new all-time high. Global bond markets are also benefitting from this safe-haven demand, with yields declining worldwide.
Upcoming Reports and Earnings Season
Attention is turning toward upcoming earnings results as the Q3 earnings season kicks off. According to Bloomberg Intelligence, 71% of the 24 S&P 500 companies that have reported thus far have surpassed expectations. Although Q3 profits are projected to rise by +7.2% year-over-year, it remains the smallest increase in two years, contributing to a cautious market outlook.
Global Market Performance
Overseas markets are also showing positive movements, with the Euro Stoxx 50 up +1.04%, China’s Shanghai Composite rising +1.22%, and Japan’s Nikkei Stock 225 increasing by +1.76% today.
