The S&P 500 Index ($SPX) (SPY) today is up +1.01%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.86%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.29%. December E-mini S&P futures (ESZ25) are up +1.01%, and December E-mini Nasdaq futures (NQZ25) are up +1.31%.
Stock index futures are climbing today and adding to last Friday’s gains, with the S&P 500 and Nasdaq 100 posting 1-week highs. Market sentiment has improved as US-China trade tensions eased after President Trump on Sunday said that “I think we’re going to be fine with China.” Stocks are also seeing support from optimism that Q3 earnings results will continue to surprise to the upside.
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Treasury Secretary Bessent said the US and China will hold talks this week in Malaysia to prepare for President Trump’s meeting with Chinese President Xi Jinping later this month on the sidelines of the Asia-Pacific Economic Cooperation conference in South Korea.
Better-than-expected Chinese economic news is supportive of global growth prospects. China Q3 GDP rose +1.1% q/q and +4.8% y/y, stronger than expectations of +0.8% q/q and +4.7% y/y. Also, China’s Sep industrial production rose +6.5% y/y, stronger than expectations of +5.0% y/y. In addition, the China’s Sep jobless rate unexpectedly fell -0.1 to 5.2%, showing a stronger labor market than expectations of no change at 5.3%.
The shutdown of the US government continues into its fourth week, weighing on market sentiment and delaying key economic reports. The government shutdown means delays in the release of government reports, including the last three weeks of weekly initial unemployment claims and the Sep payroll report. The Bureau of Labor Statistics (BLS) said the September consumer price report, which was originally scheduled to be released last Wednesday, will be released this Friday. The White House has warned that if the government shutdown lingers, 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%.
Trade tensions between the US and China, the ongoing US government shutdown, and fears about credit quality in the US have sparked a buying spree in precious metals as a haven, with gold and silver reaching fresh all-time highs last Friday.
The markets this week will focus on earnings results as the Q3 earnings season continues. Rising corporate earnings expectations are a bullish backdrop for stocks. According to Bloomberg Intelligence, 85% of the S&P 500 companies that have reported so far have beaten forecasts. Also, more than 22% of companies in the S&P 500 that have provided guidance for their Q3 earnings results are expected to beat analysts’ expectations, the highest in a year. However, Q3 profits are expected to have risen by +7.2% y/y, the smallest increase in two years. Also, Q3 sales growth is projected to slow to +5.9% y/y 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 are higher today. The Euro Stoxx 50 rose to a 2-week high and is up +0.96%. China’s Shanghai Composite closed up +0.63%. Japan’s Nikkei Stock 225 rallied to a new record high and closed up sharply by +3.37%.
Interest Rates
December 10-year T-notes (ZNZ5) today are up +2 ticks. The 10-year T-note yield is down -1.0 bp to 3.999%. T-notes recovered from early losses and turned higher today due to a slide in inflation expectations after the 10-year breakeven inflation rate fell to a 4.25-month low of 2.266%. T-notes also have support due to 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.
Strength in stocks today has curbed safe-haven demand for government debt securities and is limiting gains in T-note prices. Also, the easing of US-China trade tensions has curbed safe-haven demand for government debt securities and is undercutting T-note prices after President Trump said things will be “fine” with China.
European government bond yields are mixed today. The 10-year German bund yield is up +0.7 bp to 2.588%. The 10-year UK gilt yield is down -1.5 bp to 4.516%.
German Sep PPI fell -0.1% m/m and -1.7% y/y, weaker than expectations of +0.1% m/m and -1.5% y/y.
Late last Friday, S&P Global Ratings lowered France’s sovereign debt credit rating to A+ from AA-, citing the country’s budget uncertainty as “elevated” despite the submission of a 2025 draft budget.
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
The Magnificent Seven technology stocks are moving higher today to lend support to the overall market. Apple (AAPL) is up more than +3% and Meta Platforms (META) is up more than +1%. Also, Alphabet (GOOGL), Amazon.com (AMZN), and Tesla (TSLA) up more than +1%. In addition, Microsoft (MSFT) is up +0.84% and Nvidia (NVDA) is up +0.40%.
Chipmakers and AI infrastructure stocks are moving higher today to support gains in the broader market. ON Semiconductor (ON) is up more than +7% to lead gainers in the Nasdaq 100 and Super Micro Computer (SMCI) is up more than +6%. Also, KLA Corp (KLAC) is up more than +4%, and Micron Technology (MU), Lam Research (LRCX), Microchip Technology (MCHP), and ARM Holdings Plc (ARM) are up more than +3%. In addition, GlobalFoundries (GFS), NXP Semiconductors NV (NXPI), Applied Materials (AMAT), and Intel (INTC) are up more than +2%.
Cryptocurrency-exposed stocks are climbing today with the price of Bitcoin up more than +3% following last Friday’s fall to a 3.75-month low. As a result, Coinbase Global (COIN), Galaxy Digital (GLXY), MARA Holdings (MARA), Riot Platforms (RIOT), and Strategy (MSTR) are up more than +3%.
Celcuity Inc. (CELC) is up more than +45% after reporting “statistically significant” improvement in a trial of its gedatolisib drug in combination with palbociclib and fulvestrant in treatment of breast cancer patients.
Cleveland-Cliffs (CLF) is up more than +22% after reporting a Q3 adjusted loss per share of -45 cents, a smaller loss than the consensus of -47 cents. Also, the company said it had entered into an agreement with a “major global steel producer.”
Sable Offshore Corp. (SOC) is up more than +6% after US Secretary of Energy Wright supported the company’s effort to restart one of its California oil projects that is awaiting state approval.
Lululemon Athletica (LULU) is up more than +4% after BNP Paribas Exane upgraded the stock to neutral from underperform.
Cooper Cos. (COO) is up more than +4% after the Wall Street Journal reported that Jana Partners has built as take in the company and plans to push for strategic alternatives.
nCino (NCNO) is up more than +4% after Raymond James upgraded the stock to strong buy from outperform with a price target of $36.
Hologic (HOLX) is up more than +2% on news that Blackstone and TPG Inc are in advanced negotiations to acquire the company.
AppLovin (APP) is down more than -3% to lead losers in the S&P 500 and Nasdaq 100 after the New York Times reported that several state regulators have reached out to short sellers in a possible preliminary probe of the company.
Progressive Corp (PGR) is down more than -2% after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $214.
Marvell Technology (MRVL) is down more than -2% after Barclays downgraded the stock to equal weight form overweight.
Rivian Automotive (RIVN) is down more than -1% after Mizuho Securities downgraded the stock to underperform from neutral with a price target of $10.
Astera Labs (ALAB) is down more than -1% after Barclays downgraded the stock to equal weight from overweight.
Earnings Reports(10/20/2025)
AGNC Investment Corp (AGNC), BOK Financial Corp (BOKF), Cleveland-Cliffs Inc (CLF), Crown Holdings Inc (CCK), RLI Corp (RLI), Steel Dynamics Inc (STLD), Summit Therapeutics Inc (SMMT), W R Berkley Corp (WRB), Wintrust Financial Corp (WTFC), Zions Bancorp NA (ZION).
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