U.S. Markets Rally on Hopes of a Trade Truce
Monday brought a strong rally on Wall Street. The S&P 500 and Nasdaq jumped over 1%, fueled by reports that the U.S. and China had reached a preliminary trade deal. Negotiations over the weekend in Malaysia led to an agreement expected to be finalized Thursday, when Presidents Trump and Xi meet at the ASEAN summit.
What the Agreement Includes
Washington agreed to withdraw its threat to impose 100% tariffs on Chinese imports starting November 1, while Beijing promised not to restrict rare earth metal exports and to boost purchases of U.S. soybeans. China also committed to cracking down on fentanyl exports and may allow U.S. users continued access to TikTok.
Fed Leadership and Policy Outlook
Treasury Secretary Bessent confirmed that President Trump will name a new Fed Chair by year-end, with candidates including Christopher Waller, Kevin Warsh, Kevin Hassett, Michelle Bowman, and Rick Rieder. The decision could shift the Fed’s stance toward a more dovish approach.
The FOMC meets this week and is widely expected to cut rates by 25 basis points. Futures imply a 98% chance of that outcome.
Inflation and the Government Shutdown
Markets also found support in softer inflation data — annual CPI came in at 3.0%, slightly below forecasts. However, the ongoing government shutdown, now in its fifth week, continues to weigh on economic activity. Bloomberg Economics estimates 640,000 federal workers are furloughed, which could temporarily push unemployment to 4.7%.
Tech Earnings in Focus
Investors are watching key earnings reports from the “Magnificent Seven.” Alphabet, Meta, and Microsoft report Wednesday, while Apple and Amazon follow Thursday. So far, 84% of S&P 500 companies have beaten forecasts, marking the best quarter since 2021, even though profit growth has slowed to 7.2% year-over-year.
Market Leaders: Tesla, Qualcomm, and Crypto
All seven mega-cap techs closed higher: Tesla jumped 4.3%, Alphabet 3.6%, and Nvidia and Apple each over 2%.
Chipmakers led the rally, with Qualcomm surging 11% after unveiling a new AI chip, Marvell up 5%, Arm up 4%, and Intel gaining 3%.
Crypto stocks joined the advance as Bitcoin rose 3% and Ethereum 5%. Riot Platforms gained 7%, Coinbase 2%.
Mergers and Corporate Moves
Novartis announced plans to acquire Avidity Biosciences for $12 billion, sending RNA shares up 42%. Huntington Bancshares agreed to acquire Cadence Bank for $7.4 billion, expanding its southern U.S. footprint.
Keurig Dr Pepper rose over 7% after raising full-year guidance, while Lululemon signed a partnership with the NFL and Fanatics to launch a fan apparel line.
Subscribe to stay up to date with the latest events in the financial markets.
Telegram: @bigstakeinvest
Twitter: @BigStakeTrades
Telegram: @bigstakeinvest
Twitter: @BigStakeTrades