The S&P 500 Index ($SPX) (SPY) on Wednesday closed up +0.58%, the Dow Jones Industrials Index ($DOWI) (DIA) closed flat, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +1.19%. December E-mini S&P Futures (ESZ25) rose +0.60% and December E-mini Nasdaq Futures (NQZ25) rose +1.17%.
Most stock indexes rose on Wednesday, with the S&P 500 and Nasdaq 100 hitting new all-time highs. Strength in semiconductor infrastructure and artificial intelligence stocks on Wednesday supported gains in the broader market. Optimism that growth in the AI ​​sector and spending on artificial intelligence will translate into corporate profits is a major bullish factor for stocks. Stocks are also supported by hopes that a resilient U.S. economy and additional easing from the Federal Reserve will continue to support the economy.
US MBA mortgage applications fell -4.7% in the week ending October 3, with the purchase mortgage subindex down -1.2% and the refinance mortgage subindex down -7.7%. The average 30-year fixed-rate mortgage fell -3 bp to 6.43% from 6.46% the previous week.
The minutes of the September 16-17 FOMC meeting had a hawkish tone, saying: “Most policymakers judged that it would be appropriate to further ease policy for the remainder of the year,” but “most participants emphasized upside risks to their inflation outlook.”
The US government shutdown is now in its second week, weighing on market sentiment and delaying key economic reports. The government shutdown means delays in the release of government reports, including Tuesday’s August U.S. trade report and last Friday’s monthly payrolls report. A prolonged shutdown could also delay the government’s inflation data, which is scheduled for release on October 15. The White House has warned that if the government shutdown is prolonged, it would lead to widespread layoffs of employees in government programs that do not align with President Trump’s priorities. Bloomberg Economics estimates that 640,000 federal workers will be laid off during the shutdown, which would expand jobless claims and push the unemployment rate to 4.7%.
The ongoing US government shutdown, expectations of further Fed easing, President Trump’s criticism of the Fed, and political uncertainty in France and Japan are leading investors to seek safe-haven assets such as gold and Bitcoin. Gold prices soared above $4,000 an ounce to hit another all-time high on Wednesday. According to the latest data, the People’s Bank of China increased its gold holdings in September for the 11th consecutive month.
This week the market’s attention will be focused on any developments related to tariffs, trade or attempts by lawmakers to end the current US government shutdown. On Thursday, Fed Chair Powell will deliver welcoming remarks at a Fed community bank conference. On Friday, the University of Michigan October Consumer Confidence Index is expected to fall -1.1 to 54.0.
Rising corporate earnings expectations are a bullish backdrop for stocks. According to Bloomberg Intelligence, more than 22% of S&P 500 companies provided guidance for their third-quarter earnings results that are expected to exceed analyst expectations, the highest in a year. However, third quarter earnings are expected to have increased +7.2%, the smallest increase in two years. Additionally, third quarter sales growth is expected to slow to +5.9% from 6.4% in the second quarter.
Markets are pricing in a 93% chance of a -25bp rate cut at the next FOMC meeting on October 28-29.
Foreign stock markets closed mixed on Wednesday. The Euro Stoxx 50 closed up +0.64%. China’s Shanghai Composite did not trade and is closed for the week-long Lunar New Year holiday. Japan’s Nikkei Stock 225 closed down -0.45%.
Interest rates
The December 10-year Treasury bond (ZNZ5) closed down -2 ticks on Wednesday. The 10-year Treasury yield rose +0.4 bps to 4.127%. Treasury bond prices gave up their early gains on Wednesday and fell after the S&P 500 rose to a new record, dampening demand for safe-haven government debt securities. Weak demand from the Treasury’s auction for $39 billion in 10-year Treasury notes also weighed on Treasury note prices on Wednesday, as the auction had a bid-to-cover ratio of 2.48, below the 10-auction average of 2.57.
Treasuries initially rose on Wednesday, amid concerns about the ongoing US government shutdown, which could lead to additional job losses, reduced consumer spending and a weakened US economy, potentially allowing the Federal Reserve to continue cutting interest rates.
European government bond yields fell on Wednesday. The German 10-year bond yield fell to a three-week low of 2.666% and ended down -3.1 basis points at 2.679%. The 10-year UK bond yield fell -1.0 bp to 4.709%.
August German industrial production fell -4.3% mom, weaker than expectations of -1.0% mom and the biggest drop in almost 3.5 years.
Muller, a member of the ECB Governing Council, said the eurozone economy is slowly recovering and inflation is in line with the ECB’s 2% target.
The swaps price in a 1% chance that the ECB will cut rates by -25 bps at its next policy meeting on October 30.
US Stock Engines
Shares of chip makers and AI infrastructure rose on Wednesday, providing a supportive factor for the broader market. Advanced Micro Devices (AMD) closed up more than +11% and led gains in the S&P 500 and Nasdaq 100. Additionally, Dell Technologies (DELL) closed up more than +9% and Super Micro Computer (SMCI) and Marvell Technology (MRVL) closed up more than +6%. Additionally, Micron Technology (MU) and ON Semiconductor (ON) closed with gains of more than +5%, and ARM Holdings Plc (ARM) and Microchip Technology (MCHP) closed with gains of more than +3%. Finally, NXP Semiconductors NV (NXPI), Applied Materials (AMAT), Broadcom (AVGO), Nvidia (NVDA), and GlobalFoundries (GFS) closed with gains of more than +2%.
Gold mining stocks rose on Wednesday after the price of gold soared more than $4,000 an ounce to a new record. Anglogold Ashanti Plc (AU), Coeur Mining (CDE) and Gold Fields Ltd (GFI) closed with gains of more than +3%, and Newmont (NEM) closed with gains of more than +1%.
AST SpaceMobile (ASTS) closed up more than +8% after signing a deal to provide direct-to-cellular connectivity when needed for Verizon customers starting in 2026.
Confluent (CFLT) closed up more than +7% after Reuters reported that the company is exploring a sale after receiving acquisition interest.
Rocket Lab (RKLB) closed with a gain of more than +6% after signing a contract with iQPS to launch three more satellites for the Japanese company.
Datadog (DDOG) closed up more than +6% after Bernstein raised his price target on the stock to $170 from $147.
Freeport-McMoRan (FCX) closed up more than +5% after Citigroup upgraded the stock to buy from neutral with a $48 price target.
Constellation Energy (CEG) closed up more than +4% after Seaport Global Securities upgraded the stock to buy from neutral with a $407 price target.
Penguin Solutions (PENG) closed down more than 15% after forecasting fiscal 2026 sales of between $1.31 billion and $1.59 billion, with the midpoint below the consensus of $1.48 billion.
Fair Isaac Corp (FICO) closed down more than -9% to lead losers in the S&P 500 after rival Equifax said its VantageScore 4.0 service will offer mortgage credit scores for $4.50 through the end of 2027.
Joby Aviation (JOBY) closed down more than -7% after offering a $500 million block of shares overnight in a range of $16.85 to $17.35, well below Tuesday’s closing price of $18.91.
Defensive food companies retreated on Wednesday as the broader market strengthened. Tyson Foods (TSN) closed down more than -3%. Additionally, JM Smucker (SJM) and General Mills (GIS) closed with losses of more than -2%. Additionally, Kraft Heinz (KHC), Mondelez International (MDLZ), Conagra Brands (CAG), and Campbell Company (CPB) closed with losses of more than -1%.
Live Nation Entertainment (LYV) closed down more than -3% after announcing that it intends to offer $1.3 billion in convertible senior notes due 2031.
Intercontinental Exchange (ICE) closed down more than -1% after TD Cowen lowered its price target on the stock to $199 from $212.
Edwards Lifesciences (EW) closed down more than -1% after Oppenheimer & Co. downgraded the stock to market perform from outperform.
Earnings Reports (10/9/2025)
Apogee Enterprises Inc (APOG), Applied Digital Corp (APLD), Byrna Technologies Inc (BYRN), Delta Air Lines Inc (DAL), Helen of Troy Ltd (HELE), Neogen Corp (NEOG), Oil-Dri Corp of America (ODC), Park Aerospace Corp (PKE), PepsiCo Inc (PEP).
On the date of publication, Rich Asplund had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
