U.S. stocks add to all-time highs ahead of key earnings, U.S.-China deal hopes

[Drapeau américain]

Wall Street's major averages rose to new intraday highs on Monday, as the biggest tech companies are set to report earnings this week and the Federal Reserve prepares for an interest rate cut decision.

The benchmark S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) was last +0.9% in afternoon trade, while the Nasdaq Composite (COMP:IND [https://seekingalpha.com/symbol/COMP:IND]) was +1.6%, and the blue-chip Dow (DJI [https://seekingalpha.com/symbol/DJI]) was +0.4%. All three indexes reached intraday highs early in the session.

“This is a consequential week for markets, with a Federal Reserve meeting and nearly every mega-cap tech company's earnings. This all comes as stocks are priced for perfection with the month of October shaping up to be another very positive month, following an extremely positive September,” said Clark Bellin, president and CIO of Bellwether Wealth.

“Stocks being at record highs heading into a busy week of news and data points may be a recipe for elevated volatility, which can be an opportunity for investors who have missed the market's rally over the past several months,” Bellin added.

This week the spotlight will be on five [https://seekingalpha.com/news/4508307-earnings-week-ahead-aapl-msft-amzn-meta-goog-ba-xom-cvx-pfe-ma-v-pypl-sofi-and-more] “Magnificent Seven” names: Apple (AAPL [https://seekingalpha.com/symbol/AAPL]), Alphabet (GOOG [https://seekingalpha.com/symbol/GOOG]), Amazon (AMZN [https://seekingalpha.com/symbol/AMZN]), Microsoft (MSFT [https://seekingalpha.com/symbol/MSFT]), and Meta Platforms (META [https://seekingalpha.com/symbol/META]), as they are to report on earnings this week.

Qualcomm (QCOM [https://seekingalpha.com/symbol/QCOM]) shares surged +11.9% on Monday as it announced [https://seekingalpha.com/news/4508331-qualcomm-looks-to-take-on-nvidia-amd-as-it-enters-ai-accelerator-market] its entry into the AI accelerator market. Also, shares of Nvidia (NVDA [https://seekingalpha.com/symbol/NVDA]) rose +2.8%, while Broadcom (AVGO [https://seekingalpha.com/symbol/AVGO]) added +1.6%, and Apple (AAPL [https://seekingalpha.com/symbol/AAPL]) were +1.1%.

“We expect another strong round of mega cap tech earnings reports, given the relentless demand for AI technology and infrastructure. While profitability in AI remains an unknown, investors for right now are willing to overlook this as the AI arms race heats up,” Bellin said.

The Fed will also announce its monetary policy decision on October 29, Wednesday. It is widely expected that the FOMC will deliver another rate cut.

The Fed is “likely to cite the ongoing slowdown in the labor market and uncertainty over the government shutdown as reasons for why lower rates are warranted. This is an especially important meeting to hear the Fed's latest thinking on the state of the economy, especially given the lack of economic data released in recent weeks since the shutdown began,” Bellin said.

On the trade front, U.S. President Donald Trump and Chinese President Xi Jinping are expected to meet face-to-face to address trade disputes on Oct. 30, at the 2025 Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea.

Over the weekend, Trump unveiled [https://seekingalpha.com/news/4508441-trump-announces-trade-deals-across-asia-to-bolster-u-s-ahead-of-xi-meeting] a series of trade pacts during his first day in Asia. Trump signed separate trade and mineral agreements with Malaysia and Cambodia.

Also, the Chicago Fed estimates that October's unemployment rate rose [https://seekingalpha.com/news/4508656-chicago-fed-forecasts-october-unemployment-rate-at-435-little-changed-from-september] to 4.35%, slightly higher than 4.34% in September.

Over in the bond market, the 10-year Treasury yield (US10Y [https://seekingalpha.com/symbol/US10Y]) dropped 2 basis points to 4.00%, while the 2-year yield (US2Y [https://seekingalpha.com/symbol/US2Y]) rose 1 basis points to 3.51%. A $69B 2-Year Note Auction stopped on the screws.

Wall Street on Friday soared and ended at a record high after market participants, starved of economic data during the ongoing U.S. government shutdown, received a reprieve in the form of a cooler-than-expected consumer inflation report.

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