Stocks Get Month-End Lift as AI Fuels Historic Run: Markets Wrap
(Bloomberg) — Wall Street’s blistering bull market got fresh fuel at end of a month that’s lived up to its volatile reputation, with stocks climbing as the artificial-intelligence euphoria shows no signs of abating.
Following a brief pause in the S&P 500’s $17 trillion rally, the gauge bounced on solid earnings from Amazon.com Inc. and Apple Inc. The bond market steadied after a post-Federal Reserve rout. The dollar rose. A jump in oil waned as President Donald Trump denied he’d made a decision to strike military targets in Venezuela.
Subscribe to the Stock Movers Podcast on Apple, Spotify and other Podcast Platforms.
From geopolitical to trade risks, a US government shutdown and elevated valuations, equity traders had a lot to digest in October. Ultimately what’s prevailing is confidence in Corporate America and optimism that Fed rate cuts will keep momentum going for earnings.
Since the meltdown in April, the S&P 500 has soared almost 40% and is now on pace for its longest streak of monthly gains since 2021. The superlative is even better for the Nasdaq 100: a seven-month surge that’s set to be the longest in eight years, buoyed by big tech’s pristine balance-sheets and AI bullishness.
There’s no question that flows remain supportive. Global equities lured $17.2 billion in the week ending Oct. 29, said Bank of America Corp., citing EPFR data. And strategist Michael Hartnett bets the AI equity leadership “ain’t budging for the time being.”
“We maintain our conviction that AI-related stocks should drive further equity performance and believe that underallocated investors should add exposure to the theme through a diversified approach,” said Mark Haefele at UBS Global Wealth Management.
The S&P 500 rose to around 6,850. A gauge of the Magnificent Seven megacaps climbed 1.5% Friday, poised for its longest monthly run since 2023. Amazon jumped 11%. Apple was little changed after gaining as much as 2.2%.
The Treasury market was also set for a month of gains even as momentum waned this week after Fed Chair Jerome Powell downplayed a December rate cut. The dollar was set for its best month since July.
Earnings season remains top of mind for equity investors, and so far it’s going very well. Results from more than 60% the companies in the S&P 500 are in, and the vast majority of those firms have topped Wall Street estimates, according to data compiled by Bloomberg.
Ryan Grabinski at Strategas noted that mentions of “AI” in corporate transcripts continue to accelerate.
“Any concerns I previously had about a slowdown in capital expenditure appear to have been put to rest, at least for another quarter, as investment activity remains strong,” he said.
As enthusiasm and spending around artificial intelligence expands, AI is becoming increasingly integrated into sectors beyond technology, Grabinski said.
“This trend not only creates broader opportunities, but should also help support a more diversified market advance,” he concluded.
Market breadth remains a concern for traders. Michael Burry, the man who made his name shorting the US housing market, sent what appears to be a cryptic warning to retail investors about market exuberance. Equity performance in 2025 has been characterized by extreme concentration of volatility episodes, according to Barclays Plc strategists.
Meantime, the S&P 500 Index trades at 23 times forward earnings, well above its average of 16 over the past two decades. For the cohort of tech megacaps, valuations are even higher, at 31 times forward earnings.
If history is any guide, November kicks off the best six months of the year for US equities. But the question is whether those year-end gains have already been priced into the market following one of the S&P 500’s biggest stretches since the 1950s.
“We are in the seasonally strong fourth quarter, so we are buying dips,” said Thomas Lee at Fundstrat Global Advisors. “There are many sectors posting double digit growth, so this is not only an AI story but rather demonstrates US corporates and multinationals are able to generate strong earnings gains.”
“With markets hovering around all-time highs, driven once again by a handful of stocks, a key question we’ve been receiving in meetings lately is whether performance will broaden out,” said Chris Senyek at Wolfe Research.
Even though valuations remain at their long-term median for mid caps, the lack of earnings growth over the past several years led him to conclude that the market weighted large cap leadership will continue through year-end.
“Our sense is, with the AI spending narrative continuing to play a key role in markets, combined with large cap fund flows/retail investor engagement, large caps will likely continue to be favored,” Senyek said. “We don’t see the market broadening out until there is a sustainable shift in fundamentals/earnings for small and mid caps.”
Corporate Highlights:
Apple Inc. projected a jump in sales over the holiday season after releasing new iPhones and worked to reassure investors concerned about a decline in revenue from China. Amazon.com Inc. posted robust cloud growth that reassured investors that the tens of billions of dollars the company and its peers are pouring into artificial intelligence will pay off. Nvidia Corp. Chief Executive Officer Jensen Huang still hopes to sell chips from the company’s Blackwell lineup to customers in China, though he has no current plans to do so, he told reporters Friday. Exxon Mobil Corp. and Chevron Corp. outperformed Wall Street expectations after new oilfield projects and acquisitions boosted crude output. Coinbase Global Inc., the largest US crypto exchange, reported revenue that exceeded Wall Street’s third-quarter estimates on the back of an uptick in trading while token prices climbed to record highs. Carlyle Group Inc. posted a slide in earnings at its private equity arm during the third quarter, leaning on the credit and secondaries businesses to carry the firm as it navigates a choppy dealmaking recovery. Colgate-Palmolive Co. reported third-quarter earnings above Wall Street’s consensus, driven by resilient consumer demand in Latin America. AbbVie Inc.’s beauty business weakened again last quarter, underscoring ongoing struggles in its aesthetics division even as booming sales of new anti-inflammatory drugs fueled higher-than-expected revenue and a raised annual forecast. What Bloomberg Strategists say…
“A major leg higher for the S&P 500 will require a fresh catalyst, but a declining vol backdrop should keep stocks melting up even as the macro outlook grows murkier.”
—Michael Ball, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.3% as of 12 p.m. New York time The Nasdaq 100 rose 0.7% The Dow Jones Industrial Average was little changed The Stoxx Europe 600 fell 0.5% The MSCI World Index rose 0.2% Bloomberg Magnificent 7 Total Return Index rose 1.5% The Russell 2000 Index rose 0.2% Currencies
The Bloomberg Dollar Spot Index rose 0.1% The euro fell 0.2% to $1.1540 The British pound fell 0.2% to $1.3131 The Japanese yen was little changed at 154.07 per dollar Cryptocurrencies
Bitcoin rose 2.5% to $110,173.37 Ether rose 2.8% to $3,860.63 Bonds
The yield on 10-year Treasuries was little changed at 4.10% Germany’s 10-year yield was little changed at 2.64% Britain’s 10-year yield was little changed at 4.42% The yield on 2-year Treasuries was little changed at 3.60% The yield on 30-year Treasuries advanced one basis point to 4.67% Commodities
West Texas Intermediate crude rose 0.1% to $60.66 a barrel Spot gold fell 0.3% to $4,012 an ounce ©2025 Bloomberg L.P.
