Stocks Extend Gains Amid Trade Relief, Strong Earnings, and Policy Cues

Index Update:  U.S. stocks posted solid gains in October, with the Dow up 2.5%, the S&P 500 rising 2.3%, and the Nasdaq surging 4.7%, driven by AI momentum, easing U.S.-China trade tensions, and the Fed’s latest rate cut. Strong corporate earnings also supported sentiment, as over 80% of S&P 500 companies beat expectations. Investors now look ahead to results from Berkshire Hathaway, Palantir, AMD, Uber, and McDonald’s. However, the ongoing U.S. government shutdown continues to delay key economic data, while China has moved to ease trade frictions by lifting export controls on rare earths and halting probes into U.S. chipmakers.

Market Movers:  On Friday, the top gainers were Rani Therapeutics Holdings, Inc. (+51.72%), followed by Cabaletta Bio, Inc. (+46.15%). On the contrary NLS Pharmaceutics Ltd. (-93.06%), and Boqii Holding Limited. (-76.43%) declined the most the same day.

Commodities Update:  Oil prices extended gains on Monday, with WTI rising to $61.2 per barrel and Brent to $65, marking a fourth consecutive session of increases. The rally followed OPEC+’s decision to pause production hikes in the first quarter of next year after a modest 137,000 bpd increase in December, easing fears of oversupply. Prices were further supported by geopolitical tensions, including U.S. sanctions on Russian oil majors and Ukrainian drone attacks on Russian energy infrastructure. Meanwhile, gold prices fell below $4,000 per ounce as safe-haven demand weakened following a U.S.-China trade agreement and reduced expectations for further Fed rate cuts. Chair Jerome Powell signaled last week’s rate cut could be the final one this year, while China’s removal of a tax incentive on gold sales also weighed on demand.

Macro Updates:  China and the U.S. reached a new trade agreement aimed at easing tensions, with Beijing lifting export controls on key materials such as rare earths, gallium, and graphite, and ending probes into U.S. semiconductor firms. In exchange, Washington will extend a tariff pause and scrap a planned 100% levy on Chinese goods. The deal also includes China’s commitment to buy 12 million metric tons of U.S. soybeans this season and at least 25 million tons annually for the next three years, marking a step toward stabilizing trade relations after months of friction.

Bonds Commentary:  The U.S. 10-year Treasury yield held near 4.1% on Monday, its highest in three weeks, as investors awaited key economic data amid the ongoing government shutdown, which has delayed major reports like the jobs data. Markets are now looking to private indicators such as ADP employment and ISM PMIs for guidance. The Fed’s recent 25 bps rate cut met expectations, but Chair Powell signaled that another cut in December is uncertain, with odds falling to about 67% from over 90%. Meanwhile, U.S.-China relations improved after the Trump-Xi summit, with both sides easing trade measures — China suspending rare earth export controls and the U.S. pausing new tariffs.

Futures Update:  U.S. stock futures edged higher on Monday following a strong October performance, with investors focusing on upcoming corporate earnings amid limited economic data due to the ongoing government shutdown. Dow futures rose 0.2%, S&P 500 gained 0.4%, and Nasdaq 100 advanced 0.6%. All major indexes ended October in positive territory — the S&P 500 up 2.3%, Dow up 2.5%, and Nasdaq outperforming with a 4.7% gain — after a week dominated by tech earnings, central bank moves, and U.S.-China trade discussions.

The S&P 500 delivered its sixth consecutive monthly gain in October 2025, rising 2.27% to close at 6,840.20 on October 31, with a bullish green candle reflecting strong buying amid intra-month highs near 6,920 and lows around 6,550.  Exponential moving averages remain in perfect bullish alignment, with the 20-period at 5,865, 50 at 5,076, 100 at 4,247, and 200 at 3,281, all well below price to provide layered dynamic support. The 14-period RSI stands overbought at 75.41, indicating sustained momentum but no bearish divergence yet. This streak, the longest since 2021, underscores resilient upward traction driven by earnings resilience and seasonal tailwinds. Outlook remains bullish while price holds above EMAs, targeting 7,000+ amid historical November strength averaging 2.7% in similar setups. However, elevated RSI warns of potential pullbacks to 6,500-6,000; monitor for catalysts like rate decisions or breaks below key averages that could signal deeper corrections.