Markets finished a highly volatile week with gains on Friday as geopolitical tensions in the Middle East slightly cooled and bond yields were stable. The recovery of the AI trade today after yesterday's confusion revenue outlook from OpenAI helped the overall markets as well. The Nasdaq gained 0.64%, the S&P rose 0.59%, the Russell was up 0.46%, and the Dow was higher by 0.83%. The VIX was down 3¾% to 14.8. The yield on the 10-year Treasury closed at 5.24% and the odds of a rate hike this month are still down to just 20%. Oil was fractionally higher after President Trump reported productive talks with Iran and the announcement of a deal with Russia to release supplies of diesel fuel. Metals were higher across the board as yields and oil were stable. Crypto also saw a rebound of 1% today.
Nine of the eleven major sectors were higher today. Those sub-sectors outperforming the Nasdaq today were Genomics, Cybersecurity, Datacenters, Biotech, Cloud, Software, Photonics/Optics, Metals/Mining, Robotics, AI, Oncology, Pharmaceuticals, Blockchain, Internet, Defense Tech, Data Center Supply, Electrification, Defense, Nuclear, Reshoring, AI Power, Nanotech, and many more up 0.1–0.6%. There are no noteworthy earnings on Monday.
For the first full week of October, the major averages were mostly higher with the exception of the Russell 2000 small cap index. The S&P gained 1.14%, the Nasdaq was up 0.64%, the Dow was higher by 0.93%, while the Russell was down 0.92%. Tuesday kicks off Q3 earnings season, and markets will get inflation data with CPI on Wednesday and the PPI on Thursday.
One More Thing — Bull markets that made it to their fourth birthday have historically done quite well in year 5. This one turns four next week. The bull market ended only once in year 5 and that was more than 50 years ago. Also, this is the third best start to a bull market by its fourth birthday. The two better (the '80s bull and the 2010s bull) each soared in year 5. Yes, this bull might be getting older, but that doesn't blindly mean it has to stop.
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Content curated and written daily by Douglas Emitte
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