Stocks Climb at Start of Busy Week for Earnings: Markets Wrap
(Bloomberg) — Wall Street traders drove stocks higher amid solid results from Corporate America while tariff tensions between the world’s two largest economies cooled. Bitcoin jumped. Bond yields edged lower.
With the earnings season now well underway, about 85% of the companies in the S&P 500 have beaten earnings estimates. That’s helped fuel a rebound in equities, which also gained steam as President Donald Trump said the US will “be fine” with China just before the two sides return to the negotiating table.
“We are seeing the typical seasonal volatility in October, but the recent swings have been relatively shallow by historical standards, as the buy the dip mentality appears to be in play,” said Rick Gardner at RGA Investments.
Gardner says the next big test may be big tech earnings as investors will be looking for more clarity on how spending on artificial intelligence is leading to profitability. Among notable results this week is Tesla Inc. China’s tightening grip on rare earths exports will likely be discussed at Intel Corp.’s and Texas Instruments Inc.’s calls.
The S&P 500 topped 6,700. Apple Inc. hovered near all-time highs as Loop Capital upgraded the stock to buy, the latest firm to cite more positive iPhone demand trends. A gauge of tech megacaps climbed 1.1%. The Russell 2000 index of small firms added 1.7%.
Deutsche Bank AG strategists noted that overall equity positioning tumbled last week and sentiment fell to net bearish. Meantime, Morgan Stanley’s Michael Wilson said that there needs to be follow through on a US-China deal and stability in earnings revisions to clear the risk of a further correction in stocks.
The yield on 10-year Treasuries declined one basis point to 4%. Bitcoin climbed 2%. The dollar edged up.
As earnings roll in, results are looking promising, according to Oppenheimer Asset Management’s John Stoltzfus. The fact that big US companies are beating expectations and guidance despite ongoing risks suggests there is “enough resilience to provide stocks with a ticket to ride,” he said.
Activity momentum improved during the quarter and positive surprises are likely this earnings season, according to JPMorgan Chase & Co. strategists led by Mislav Matejka.
“The theme of third-quarter earnings season is likely to be ongoing earnings resilience,” said Jason Pride and Michael Reynolds at Glenmede. “The S&P 500 is on pace for high single digit earnings growth on a year-over-year basis.”
They also noted that it appears that small caps are finally having their moment in the spotlight. After a challenging couple years for their bottom lines, earnings growth for the Russell 2000 is expected to increase over 35% in the third quarter.
“This trend could persist into year-end, as small caps should be beneficiaries of recently passed fiscal stimulus and the Fed’s easing cycle,” the Glenmede strategists said.
After being delayed by the US government shutdown, the Bureau of Labor Statistics will release of the September consumer price index on Friday. The data, originally slated for Oct. 15, will give Federal Reserve officials a critical piece of information on inflation ahead of their policy meeting the following week.
Economists in a Bloomberg survey forecast the core CPI, which excludes food and fuel for a better snapshot of underlying inflation, to have climbed 0.3% for a third straight month as higher import duties continue to gradually filter through to consumers. The projected monthly gain will keep the annual core CPI at 3.1%.
While traders will get a look at the delayed CPI data at the end of this week, but their immediate focus will be on earnings, especially after news about bank loan losses contributed to volatility in the financial sector last week, according to Chris Larkin at E*Trade from Morgan Stanley.
“Choppy trade has been the order of the day lately, but earnings beats from this week’s high-profile names and a reduction in US-China tensions could help the market find its footing,” he said.
Corporate Highlights:
Amazon Web Services, the world’s largest cloud provider, said its service had recovered after a widespread disruption on Monday degraded services for a range of customers including government agencies, AI companies and financial platforms. Apple Inc.’s latest generation of iPhones is off to a faster start than usual, with its most basic model surging in popularity. Cleveland-Cliffs Inc. said it’s exploring its sites for rare earth materials as the US steelmaker looks to expand its presence in metal production. Replimune Group Inc. surged after US regulators accepted its resubmitted application for a skin cancer treatment, a sign that a previous denial could be overturned. BNP Paribas SA plummeted after it was ordered to pay millions over claims it facilitated human rights abuses in Sudan, raising expectations for the total amount the lender will have to set aside to resolve the long-running litigation. Kering SA agreed to sell its beauty division to L’Oreal SA in a €4 billion ($4.7 billion) deal, with new Chief Executive Officer Luca de Meo changing course in a bid to turn around the French luxury giant’s fortunes. Worldpay’s $24.3 billion deal with Global Payments Inc. to create a payment processing behemoth avoided a deeper investigation as the UK watchdog found the deal will not weaken competition in the UK. Shares of submarine-builder TKMS rallied in their Frankfurt trading debut on Monday after the marine defense company was spun off from Thyssenkrupp AG, with investors’ eagerness to buy into Europe’s defense stock rally giving an early boost to the new stock. Contemporary Amperex Technology Co. Ltd.’s profit jumped in the third quarter, as the world’s largest maker of electric vehicle batteries defended its lead in China and pushed further into overseas markets. Holcim Ltd. is set to acquire walling-systems firm Xella from private equity firm Lone Star Funds in a €1.85 billion ($2.2 billion) deal, extending the Swiss company’s bid to diversify beyond its core cement business. Oura Health Oy, the Finnish smart ring maker, is the latest wearable company seeking to move into blood pressure monitoring. How should regulators react to the blurring line between investing and gambling? Let us know in the latest Markets Pulse survey.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.7% as of 9:56 a.m. New York time The Nasdaq 100 rose 1% The Dow Jones Industrial Average rose 0.5% The Stoxx Europe 600 rose 0.9% The MSCI World Index rose 0.9% Bloomberg Magnificent 7 Total Return Index rose 1.1% The Russell 2000 Index rose 1.7% Currencies
The Bloomberg Dollar Spot Index rose 0.1% The euro was little changed at $1.1647 The British pound fell 0.1% to $1.3407 The Japanese yen fell 0.1% to 150.79 per dollar Cryptocurrencies
Bitcoin rose 2% to $111,059.5 Ether rose 0.8% to $4,034.06 Bonds
The yield on 10-year Treasuries declined one basis point to 4.00% Germany’s 10-year yield was little changed at 2.58% Britain’s 10-year yield declined two basis points to 4.51% The yield on 2-year Treasuries was little changed at 3.47% The yield on 30-year Treasuries declined two basis points to 4.58% Commodities
West Texas Intermediate crude fell 0.8% to $57.08 a barrel Spot gold rose 1.5% to $4,316.40 an ounce ©2025 Bloomberg L.P.
