Stocks Hold Near Record on Earnings as Gold Sinks: Markets Wrap
(Bloomberg) — Wall Street traders left stocks hovering near all-time highs amid solid earnings, though calls for a breather surfaced amid signs of buyer exhaustion. Gold and silver saw steep losses as the dollar rose.
Following the S&P 500’s biggest back-to-back run since June, the gauge edged mildly up. Equity exposure among global macro hedge funds and long-only strategies remain at the highest in over a year, despite some recent de-risking amid concerns over credit and trade, Barclays Plc strategists say.
“Our near-term technical outlook is for equities to consolidate/pull back over the next few weeks,” said Craig Johnson at Piper Sandler. “We view pullbacks as healthy and necessary.”
While the US government shutdown has caused an economic data vacuum, drawdowns in equities have been short-lived as investors see them as opportunities to add risk to their portfolios.
“Another day, another dearth of US data, as the government shutdown continues, with no end in sight,” said Michael Brown at Pepperstone Group Ltd. “To my mind, the path of least resistance continues to lead to the upside, and dips remain buying opportunities.”
The S&P 500 traded near 6,745. Most shares rose, with General Electric Co. and 3M Co. pacing a rally in industrial firms. Alphabet Inc. sank as OpenAI posted a cryptic teaser for a livestream event. Texas Instruments Inc. and Netflix Inc. will report results later.
Treasuries rose, with 10-year yields falling to 3.96%. Gold and silver saw the biggest slide in years following a weeks-long rally that sent precious metals to successive record highs.
A confluence of factors dragged down the precious metals, including positive trade talks between China and the US, a stronger dollar, overstretched technicals, and uncertainty on investor positioning due to the US government shutdown and end of a seasonal buying spree in India.
Gold’s rally in recent months has been nothing short of extraordinary, fuelled by falling yields, persistent central bank buying, and expectations of further monetary easing, according to Fawad Razaqzada at City Index and Forex.com.
“Markets rarely move in straight lines,” he said. “But it is far too early to suggest that the broader bull trend has ended. While corrections are natural, it is worth pointing out that many investors missed out on the big rally. Soon, they may step in to buy the dip, which should keep the sell-off contained.”
Matt Maley at Miller Tabak says he’ll be watching the recent lows for precious metals for signs that they will likely see something more than just a hiccup over the near-term.
“Experience tells us that when you start to see wild swings in an asset after a very large rally it tends to signal that it’s getting ready for material pullback,” Maley said. “It does not necessarily signal the end of the bull market in that asset. However, these kinds of wild moves after very strong rallies can create some fear among investors and traders.”
Despite the loss of steam in the equity rally, the S&P 500 remains close to its all-time highs after the White House indicated trade talks with China were on track and strong earnings from several regional banks eased credit worries in the sector.
A string of losses at regional banks tied to alleged fraud were isolated incidents, but should be viewed as a reminder to be vigilant about underwriting standards, Goldman Sachs Group Inc. Chief Executive Officer David Solomon said.
“It is interesting that we’ve had three events that on the face seem to be three idiosyncratic events,” Solomon told CNBC. “Three idiosyncratic events does not make a trend or a systemic issue by any stretch.”
While the S&P 500 has defied virtually every warning in the past six months, clocking one of the best stretches since the 1950s, this October gap indicates some investors have been covering their shorts ahead of the Federal Reserve’s next rate decision on Oct. 29.
“October has, so far, lived up to its spooky season moniker,” said Victoria Greene at G Squared Private Wealth. “Yet equities continue to be resilient in the face of an unending stream of bad news.”
Greene says more volatility should be expected, mostly because we are exiting a period of historically low volatility.
“It really has no place to go but up. So, while consternation on bad headlines and high valuations isn’t irrational, we feel this bull market will continue to successfully climb this wall of worry to end the year on a positive note,” she concluded.
Meantime, falling oil prices may drive benchmark Treasury yields back to levels last seen more than a year ago, according to Wall Street research veteran Ed Yardeni.
Yields on 10-year Treasuries could hit 3.75% if the oil price continues to slide and the Federal Reserve lowers interest rates next week, said the strategist. His argument is based on the long-run correlation of the two asset classes, which are linked through oil’s impact on inflation.
“A growing glut of oil and fear of a global economic slowdown have pushed US West Texas Intermediate crude prices to their lowest point since fuel markets were rebounding from the Covid crash,” Yardeni Research wrote. “That will help push headline consumer inflation rates down and boost consumers’ purchasing power.”
Corporate Highlights:
General Motors Co. raised its full-year outlook and posted third-quarter results that topped Wall Street estimates on better-than-expected pickup truck sales and fresh relief from the Trump administration’s tariffs on auto parts. Coca-Cola Co. posted third-quarter sales growth that beat Wall Street expectations — a sign that consumers are snapping up the company’s beverages despite higher prices. 3M Co. raised its profit forecast for the second straight quarter as Chief Executive Officer Bill Brown’s effort to revitalize the conglomerate gains traction despite ongoing challenges from economic volatility. General Electric Co. raised its full-year outlook for a second consecutive quarter as the jet-engine manufacturer cashes in on strong air-travel demand. Zions Bancorp said its profit topped estimates despite a $50 million loss from an alleged fraud, helping reassure investors who’d feared the credit markets might be harboring some deeper pain. RTX Corp. raised its full-year profit outlook and reported third-quarter earnings that topped Wall Street expectations as sales and profit rose across its commercial aerospace and military hardware businesses. Northrop Grumman Corp. raised its earnings forecast for the year after its third-quarter profit handily beat analysts’ estimates as work accelerates on its Sentinel missile program. Philip Morris International Inc. nudged up the bottom end of its outlook for this fiscal year off the back of strong demand for its smoke-free products, including Zyn nicotine pouches. Warner Bros. Discovery Inc. said it has begun to consider various deal scenarios in light of “unsolicited interest” the media and entertainment conglomerate has received from “multiple parties” for all or part of the company. Airbnb Inc. Chief Executive Officer Brian Chesky said he didn’t integrate his company’s online travel app with OpenAI’s ChatGPT because the startup’s connective tools aren’t “quite ready” yet. UnitedHealth Group Inc. is testing a new system to streamline how medical claims are processed, an early example of what the company says is the potential for artificial intelligence to smooth out friction in billing. CoreWeave Inc. won’t increase its $9 billion offer for data center provider Core Scientific Inc., despite opposition to the deal from major shareholders. Elevance Health Inc. earnings beat Wall Street expectations, and the company affirmed its outlook for 2025, though it issued a note of caution that it still has a lot of work to do to make its way out of a historic meltdown that’s hit US insurers this year. National Fuel Gas Company of Western New York agreed to buy CenterPoint Energy Inc.’s Ohio natural gas utility to for $2.6 billion. Shares of battery manufacturer Eos Energy Enterprises Inc. jumped after it announced plans to develop a $75 million factory that it expects will help power firm Talen Energy Corp. feed Pennsylvania’s growing data centers. BNP Paribas SA reiterated its view that a recent court ruling, which had led to a stock price plunge, doesn’t apply to other cases, in an effort to contain legal uncertainty. Novo Nordisk A/S Chairman Helge Lund is stepping down after a boardroom dispute over governance and will be replaced by Lars Rebien Sorensen, a previous leader of the company who now heads its biggest shareholder. Playtech Plc tumbled after Swedish rival Evolution AB accused the British gambling technology group of commissioning a smear campaign in an attempt to “destroy its reputation.” Will we see more convergence between gaming and finance in the future? Let us know in the latest Markets Pulse survey.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.1% as of 11:59 a.m. New York time The Nasdaq 100 was little changed The Dow Jones Industrial Average rose 0.6% The Stoxx Europe 600 rose 0.2% The MSCI World Index was little changed Bloomberg Magnificent 7 Total Return Index fell 0.1% The Russell 2000 Index fell 0.1% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.2% to $1.1615 The British pound fell 0.1% to $1.3388 The Japanese yen fell 0.7% to 151.73 per dollar Cryptocurrencies
Bitcoin rose 2.1% to $113,429.09 Ether rose 2.1% to $4,083.31 Bonds
The yield on 10-year Treasuries declined two basis points to 3.96% Germany’s 10-year yield declined two basis points to 2.55% Britain’s 10-year yield declined three basis points to 4.48% The yield on 2-year Treasuries was little changed at 3.45% The yield on 30-year Treasuries declined two basis points to 4.54% Commodities
West Texas Intermediate crude rose 0.7% to $57.90 a barrel Spot gold fell 5% to $4,137 an ounce. ©2025 Bloomberg L.P.
