Market rallies into key week

When the closing bell rang last Thursday, the S&P 500 (SPX) had yet to trade outside the range of its October 10 sell-off day.

On Friday, it pushed decisively to a new all-time high after a cooler-than-expected Consumer Price Index (CPI) report appeared to boost confidence that the Fed would cut interest rates this week—and beyond:

The headline: Market tags new highs after friendly inflation data.

The fine print: This week would appear to revolve around earnings and the Fed, but US-China trade talks are still a potential wild card. While reports of a truce appear to have markets assuming the world’s two largest economies will hammer out an agreement, the possibility of market-moving rhetoric or a renewed standoff can’t be dismissed. President Trump softened his China tariff comments in the wake of the October 10 market sell-off, but he also canceled trade negotiations with Canada last week.

The number: 97%, the market-based probability (as of the end of last week) of a 0.25% Fed rate cut on Wednesday.¹

The moves: Volatility in US “rare earths” stocks continued last week. MP Materials (MP) fell nearly 11% for the week despite rallying more than 5% on Friday, while USA Rare Earth made a similar move. Both stocks rallied sharply after the White House proposed new tariffs on China—which has long dominated the rare earths market—but have since given back the majority of those gains. Morgan Stanley & Co. analysts recently detailed the importance of rare earths to US-China trade negotiations, and where they fit into the larger US AI/energy picture.²

The scorecard: The Russell 2000 (RUT) small-cap index led the market again last week, and all the major indexes ended the week with double-digit year-to-date percentage returns:

Sector returns: The strongest S&P 500 sectors last week were tech (+3%), energy (+2.4%), and industrials (+2.1%). The weakest sectors were consumer staples (-0.6%), utilities (-0.2%), and materials (+0.6%).

Stock moves: Celcuity (CELC) +36% to $70.58 on Monday, Inhibrx Biosciences (INBX) +102% to $57.29 on Friday. Arcturus Therapeutics (ARCT) -50% to $11.54 on Wednesday, Integer (ITGR) -32% to $73.89 on Thursday.

Yields and the dollar: The 10-year US Treasury yield fell to its lowest level since April 4 last Wednesday, but bounced to end the week down 0.01% at 3.99%. The US Dollar Index (DXY) climbed 0.52 to 98.95.

Futures: After hitting a new record high last Monday, December gold (GCZ5) dropped -5.7% on Tuesday, ending the week down $75.50 at $4,137.80. December WTI crude oil (CLZ5) rallied $4.35 to $61.50—its biggest up week since June. Biggest rallies: December Dry Whey (DYZ5) +11.2%, December heating oil (HOZ5) +10.2%. Biggest declines: November VIX (VXX5) -10%, November lumber (LBSX5) -7%.

This is arguably the biggest week of earnings season, with five of the six remaining Mag-7 stocks reporting, along with a boatload of high-profile pharma, energy, tech, and consumer names. Here’s a sample:

●Monday: Eagle Materials (EXP), F5 (FFIV), Keurig Dr. Pepper (KDP), Novartis (NVS), NXP Semiconductors (NXPI), PayPal (PYPL), Qorvo (QRVO), Rambus (RMBS)
●Tuesday: American Superconductor (AMSC), Check Point Software (CHKP), Costar Group (CSGP), Enphase Energy (ENPH), Repligen (RGEN), Roku (ROKU), Sofi Technologies (SOFI), Seagate Technology (STX), UnitedHealth Group (UNH), United Parcel Service (UPS), Visa (V)
●Wednesday: Boeing (BA), Caterpillar (CAT), Chipotle (CMG), Carvana (CVNA), CVS (CVS), eBay (EBAY), GE HealthCare Technologies (GEHC), Alphabet (GOOGL), Kraft Heinz (KHC), Microsoft (MSFT), Meta (META), Phillips 66 (PSX), Starbucks (SBUX), Verizon (VZ)
●Thursday: Advance Auto Parts (AAP), Apple (AAPL), Amazon (AMZN), Baxter (BAX), Bristol Myers Squibb (BMY), BP (BP), Coinbase (COIN), Estee Lauder (EL), First Solar (FSLR), Gilead Sciences (GILD), Hershey (HSY), Kimberly Clark (KMB), LKQ (LKQ), Eli Lilly (LLY), Mastercard (MA), Merck (MRK), PriceSmart (PSMT), Roblox (RBLX), Reddit (RDDT), Vulcan Materials (VMC), Wayfair (W)
●Friday: AbbVie (ABBV), Aon (AON), Colgate Palmolive (CL), Chevron (CVX), Exxon Mobil (XOM)

The Fed’s interest rate announcement is the focal point of this week’s economic calendar (regularly scheduled reports that are expected to be delayed because of the government shutdown are italicized):

●Monday: durable goods orders
●Tuesday: S&P Case-Shiller Home Price Index, FHFA House Price Index, consumer confidence
●Wednesday: trade balance in goods (advance), retail and wholesale inventories (advance), pending home sales, Fed interest rate decision
●Thursday: Q3 GDP, initial estimate
●Friday: PCE Price Index, personal income and spending, Chicago PMI

Check the Active Trader Commentary each morning for an updated list of earnings announcements, IPOs, economic reports, and other market events.

According to Morgan Stanley & Co. analysts, the fact that stock-specific risk is at its highest level since 2020 implies we’re in a good environment for stock picking. They recently highlighted 11 stocks with near-term catalysts they believe could drive meaningful moves—nine to the upside and two to the downside.³ Of the seven stocks on the list that have yet to release earnings, four are scheduled to report this week, and only one (META) is a Mag-7 stock. The others are Neurocrine Biosciences (NBIX), Atlassian (TEAM), and Ingersoll-Rand (IR).

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¹ CMEGroup.com. FedWatch Tool. 10/24/25.
² MorganStanley.com. Powering AI + Critical Materials: Potential Emerging Trends and Catalysts. 10/13/25.
³ MorganStanley.com. Conviction into Earnings. 10/21/25.