Today the S&P 500 (SPX) (SPY) is up +0.16%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.24%, and the Nasdaq 100 ($IUXX) (QQQ) is up +0.25%. E-mini S&P December futures (ESZ25) are up +0.13%, and E-mini Nasdaq December futures (NQZ25) are up +0.22%.
Stock indices rose slightly today, with the S&P 500 and Nasdaq 10 hitting all-time highs. Stocks are rising today on strength in chipmakers and AI infrastructure stocks. Shares of Advanced Micro Devices rose more than 6% today, adding to Monday’s 23% rise and driving semiconductor stocks higher on an AI spending boom.
Optimism that growth in the AI sector and AI spending will translate into corporate profits is a major bullish factor for stocks. Stocks are also supported by hopes that the resilient US economy and additional easing from the Federal Reserve will continue to support the economy.
Dovish comments Monday evening from Kansas City Fed President Jeff Schmid were negative for stocks when he said: “With inflation still very high, monetary policy should lean against demand growth to allow supply growth and ease price pressures in the economy.”
The US government shutdown has now entered its second week, weighing on market sentiment and delaying major economic reports. The government shutdown means a delay in the release of government reports, including today’s international trade data for August and last Friday’s monthly payrolls report. A prolonged lockdown could also delay government inflation data, due to be released on October 15. The White House has warned that if the government shutdown continues, it will lead to widespread layoffs of employees in government programs that do not align with President Trump’s priorities. Bloomberg Economics estimates that 640,000 federal workers will be furloughed during the shutdown, which would increase unemployment claims and push the unemployment rate to 4.7%.
The ongoing US government shutdown, expectations of further Federal Reserve easing, and political uncertainty in France and Japan are also pushing investors into safe-haven assets, such as gold and bitcoin. Gold prices rose to another record high today after Goldman Sachs raised its 2026 gold price forecast to $4,900 an ounce from $4,300, citing ETF inflows and central bank purchases. According to the latest data, the People’s Bank of China added to its gold holdings in September for the eleventh consecutive month.
The market’s focus this week will be on any new developments regarding tariffs, trade, or lawmakers’ attempts to end the ongoing US government shutdown. On Wednesday, the minutes of the Federal Open Market Committee meeting on September 16-17 will be published. On Thursday, Fed Chair Powell will deliver a welcome address at the Fed’s Community Conference. On Friday, the University of Michigan October Consumer Confidence Index is expected to drop -1.1 to 54.0.
Rising corporate earnings expectations are a bullish backdrop for stocks. According to Bloomberg Intelligence, more than 22% of companies in the S&P 500 index provided guidance for third-quarter earnings results that are expected to exceed analysts’ expectations, the highest in a year. However, third-quarter earnings are expected to rise +7.2%, the smallest increase in two years. Sales growth in the third quarter is also expected to slow to 5.9% from 6.4% in the second quarter.
Markets expect a 93% chance of a -25 basis point rate cut at the next FOMC meeting on October 28-29.
Offshore stock markets today are mixed. The Euro Stoxx 50 rose +0.16%. China’s Shanghai Composite Index was not trading and is closed due to the week-long Lunar New Year holiday. Japan’s Nikkei Stock 225 rose to a new record high and closed 0.01% higher.
Interest rates
The 10-year Treasury note (ZNZ5) rose by +1 mark today. The yield on the 10-year Treasury note fell by -0.6 basis points to 4.146%. December Treasuries rebounded from a one-week low today, and the yield on the 10-year Treasury note fell from a one-week high of 4.175%. US Treasuries are being supported by the ongoing US government shutdown, which may increase job losses and weaken the US economy, allowing the Federal Reserve to continue cutting interest rates.
Treasuries initially fell today on hawkish comments from Kansas City Fed President Schmid, who said policymakers need to keep up the pressure on inflation, which has remained stubbornly high. Supply pressures are also driving down Treasury bond prices as the Treasury Department will auction $119 billion worth of Treasuries and Treasury notes this week, starting with today’s $58 billion auction of 3-year Treasuries. Losses in Treasuries are limited because a prolonged U.S. government shutdown may weaken the economy, a supportive factor for Treasuries.
European government bond yields are moving higher today. The yield on German 10-year bonds rose +0.5 basis points to 2.724%. The 10-year UK Treasury yield rose to a one-week high of 4.753% and rose +0.2 basis points to 4.738%.
German factory orders for August unexpectedly fell by -0.8% m/m, weaker than expectations of +1.2% m/m.
The swaps exclude a 1% chance of a -25 basis point interest rate cut by the ECB at its next policy meeting on October 30.
US stock movers
Advanced Micro Devices (AMD) rose more than +6%, adding to Monday’s +23% rise, and leaders of gainers in the S&P 500 and Nasdaq 100 after Jeffries upgraded the stock to buy from hold with a price target of $300, citing the company’s deal with OpenAI. Other chipmakers and AI infrastructure stocks rose on the news, with Super Micro Computer ( SMCI ) up more than 4% and Palantir Technologies ( PLTR ) up more than 2%. Intel (INTC), Qualcomm (QCOM), ARM Holdings Plc (ARM), GlobalFoundries (GFS), and Micron Technology (MU) also rose more than 1%.
Amkor Technology (AMKR) shares rose more than 10% after the company broke ground on an advanced outsourced semiconductor testing and packaging complex in Arizona.
Shares of Dell Technologies (DELL) rose more than 5% after expected annual adjusted EPS to increase by 15% or more as demand for artificial intelligence grows.
Shares of International Business Machines (IBM) rose more than 3% to top gainers in the Dow Jones Industrials after it said it would integrate Anthropic’s Claude family of large language models into its software portfolio.
Veeva Systems (VEEV) rose more than 3% after TD Cowen upgraded the stock to buy from hold with a price target of $380.
Shares of InterContinental Exchange (ICE) rose more than 1% after the Wall Street Journal reported that the company is in talks to invest $2 billion in Polymarket.
Constellation Brands (STZ) rose more than 2% after reporting second-quarter comparable net sales of $2.48 billion, better than the consensus of $2.45 billion.
Netflix (NFLX) rose more than +1% after Seaport Global Securities upgraded the stock to buy from neutral with a price target of $1,385.
Aehr Test Systems (AEHR) fell more than -26% after reporting a first-quarter revenue decline of -16% to $11 million from $13.1 million in the same quarter a year earlier.
Ford Motor (F) fell more than -5% to lead decliners in the S&P 50 after the Wall Street Journal reported that the company faces months of turmoil in its business following a major fire at an aluminum plant in New York.
Homebuilder stocks are under pressure today after Evercore ISI downgraded the sector to a level consistent with outperformance. DR Horton (DHI), KB Home (KBH), Lennar (LEN), PulteGroup (PHM), and Toll Brothers (TOL) fell more than -2%.
Gitlab (GTLB) closed down more than -3% after Mizuho Securities downgraded the stock to neutral from outperform.
Dollar Tree (DLTR) fell more than -2% after Jeffries downgraded the stock to underperform and hold with a price target of $70.
Autoliv (ALV) stock fell more than -2% after UBS downgraded the stock to Neutral from Buy with a target price of $124.
GE Healthcare Technologies (GEHC) stock fell more than -1% after Citigroup Global Markets downgraded the stock to neutral from buy.
CarMax (KMX) stock fell more than -1% after Stevens downgraded the stock to equal weight from overweight.
Earnings Reports(10/7/2025)
McCormick & Co Inc/MD (MKC), Penguin Solutions Inc (PENG), TuHURA Biosciences Inc (HURA).
On the date of publication, Rich Asplund had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data contained in this article are for informational purposes only. This article was originally published on parchart.com
