Markets dropped this week in dramatic fashion. Will corporate earnings season allow markets to finish the year strong?
Monday
S&P 500 0.36% | NASDAQ 0.71%
The week started off with the S&P 500 and Nasdaq scoring record highs. Advanced Micro Devices (AMD) made some noise as they announced plans to partner with OpenAI. Earnings season for the 3rd quarter is also kicking off and will be closely watched.
Tuesday
S&P 500 0.38% | NASDAQ 0.67%
Markets gave up Monday’s gains as semiconductor stocks faded. The government shutdown is still unresolved, perhaps contributing to the fall in Treasury yields, which indicates a shift into safety.
Wednesday
S&P 500 0.58% | NASDAQ 1.12%
The Federal Open Market Committee (FOMC) released their September meeting minutes. The committee voted in favor of cuts, leaning more dovish than past meetings. The hawks may still get the final say as the tone was certainly on the cautious side.
Thursday
S&P 500 0.28% | NASDAQ 0.08%
The Nasdaq traded at a record high midday, with the help of NVIDIA (NVDA), but ended lower through the close. There will be a deluge of earnings releases for the rest of October which should contribute to equity gains.
Friday
S&P 500 2.71% | NASDAQ 3.56%
Markets sunk after news reports indicated the White House is considering additional, and large, tariffs on Chinese goods. This was in response to China’s limitations on rare earth mineral exports. Markets fell dramatically on the news as international tech trade is weighing on the direction of the sector. Treasury yields dipped further during the volatile trading day.
Conclusion
S&P 500 2.43% | NASDAQ 2.53%
Tariffs, inflation, and Technology were top-of-mind this week. The government finished the week without any progress on a funding resolution. The main issue to watch for markets is the impact on household spending, which should be minimal. As markets look long term, the concern will be the impacts of trade deals and the inflationary impact on tariffs. The latter is the primary focus by the Federal Reserve. Consumers are looking for interest rate breaks, so rate cuts are key to growth for the balance of the year. Consumer sentiment, which is a key data point, will go uninterrupted even with the shutdown. As we wrap up the rest of 2025, the trends are largely in favor of a strong finish the year. They may be tested again this year, but a declining interest rate environment should lend itself to a robust quarter.
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