Weekly Update for October 27-31, 2025

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Weekly Market Update Summary (October 20-24, 2025)
Market Performance:
The markets had a positive week, with a "risk-on" sentiment driving gains. Major indices saw strong performance:
Dow: +2.2% (all-time high on Friday)
NASDAQ: +2.3% (all-time high)
S&P 500: +1.9% (all-time high)
Small caps: +2.5% (lagging but showing risk-on behavior)
Overall market gain: +1.92% on above-average volume, though Thursday and Friday saw below-average volume, indicating weaker conviction.
Key Drivers:
Earnings: Strong corporate earnings, particularly from large-cap companies, fueled optimism. Thursday and Friday saw positive earnings reactions, despite a weaker Wednesday. Guidance for future profitability also boosted confidence.
CPI Report: A soft Consumer Price Index report reinforced expectations of a Federal Reserve rate cut, supporting market gains.
Fed Expectations: A 98.3% chance of a 25-basis-point rate cut is anticipated for the upcoming Fed meeting, with a 91.1% chance of another cut in December.
Geopolitical and Trade: Midweek volatility arose from mixed U.S.-China trade signals, but markets looked past this by week's end. Optimism persists about potential U.S.-China deals.
Interest Rates: The 10-year yield dropped to 4%, possibly signaling a more orderly decline compared to the prior week's "flight to safety."

Sector Performance:
Leaders: Technology (+93.6 on sector score), industrials, and healthcare outperformed. Energy saw gains due to geopolitical factors (e.g., Russian oil sanctions) but gave back some on Friday.
Laggards: Defensive sectors like utilities and staples underperformed, reinforcing the risk-on tone.
Technical and Sentiment Indicators:
Trends: The market is above the moving average but not yet in a confirmed uptrend (below 20). Weekly charts show a positive, longer-term outlook with higher highs and lows.
Volume Concerns: Below-average volume on strong up days (Thursday/Friday) suggests limited smart money participation, as seen in declining Chaikin Money Flow.
Sentiment: Investors Intelligence reading at 3.5 (slightly elevated but not extreme). VIX below 20, indicating lower volatility. Sentiment is improving but not overly exuberant.
Breadth and Momentum: Broad market participation, with growth-oriented and economically sensitive stocks leading. Momentum indicators (e.g., PMO, RSI) are positive but mixed in the short term, with some oscillators showing high readings.
Looking Ahead (October 27-31, 2025):
Key Events: Expect mega-cap earnings, Fed rate announcement, and Fed press conference. Market reactions to Fed commentary will be critical.
Seasonality: Historically positive for late October and November, with a 70%+ chance of gains.
Risks: Potential dollar strength could pressure stocks and gold. Geopolitical news and unexpected Fed signals could disrupt the positive backdrop.
Hindenburg Omen: Still looms (unconfirmed until November 7). Zweig NYSE breadth thrust update expected Monday.
Conclusion:
The S&P 500 continued its rebound from the October 10 pullback, driven by strong earnings, a favorable CPI report, and expectations of Fed rate cuts. Growth-oriented sectors led, but low volume on up days and mixed technical signals suggest caution. The upcoming week’s earnings and Fed announcements will be pivotal in sustaining the upward bias.

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DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!