Market Insights

Stocks are hitting new highs again, led by automakers and technology.

The S&P 500 rose 2.1 percent between Friday, October 17, and Friday, October 24. It was the biggest weekly gain since early August, with two-thirds of the index’s members advancing.

While uncertainty about tariffs and the government shutdown lingered, earnings were the main catalyst for price moves. Improving relations between the U.S. and China further bolstered sentiment on Sunday evening.

General Motors (GM) and Ford Motor (F) were some of the most dramatic gainers after profits and revenues beat estimates. Two positive forces are happening at the same time. First, domestic automakers are managing costs like tariffs better than feared. Second, demand for vehicles is accelerating thanks to low unemployment and consumer worries about higher prices later.

The average age of cars in the U.S. has also been increasing for more than a decade, which may create demand for new vehicles. With the Federal Reserve cutting interest rates, could autos finally come back to life?

GM plans to add conversational AI models and self-driving software next year. That helped power the biggest gain since the pandemic and established the stock at a new all-time high. F had its best week since late 2021 and closed at its highest level since mid-2024.

Tesla’s (TSLA) revenue beat but profit missed as costs rose. The EV maker plans to double production in the next two years to monetize Robotaxis and Autopilot software. The stock was little changed.

Stellantis (STLA), the owner of brands like Jeep and Chrysler, also reported a 35 percent surge in North American shipments. That further demonstrated the trend of increasing car production.

‘Substantial Framework’

Treasury Secretary Scott Bessent told NBC yesterday that his talks with Chinese Vice Premier He Lifeng produced a “substantial framework” for negotiations to ease trade tensions between the U.S. and China. He added that Presidents Trump and Xi will meet in South Korea on Thursday.

Intuitive Surgical (ISRG) led the S&P 500 on strong top- and bottom-line results. Several analysts raised price targets on the maker of robotic surgical tools as it rolls out the new da Vinci 5 system, which has more computing power and functionality.

Halliburton (HAL) had a potentially transformational quarterly report: The oil-field servicing company beat low earnings estimates by cutting costs, but emphasized a new partnership with VoltaGrid to help build data centers in the Middle East. In other words, an iconic drilling name — founded 106 years ago during the first Oklahoma oil boom — is now embracing AI. The stock had its biggest weekly gain in three years.

Las Vegas Sands (LVS) jumped on strong earnings and revenue. The casino operator is benefiting as increased Asian travel boosts its Marina Bay Sands property Singapore.

Warner Bros. Discovery (WBD) climbed after saying it’s considering potential takeover offers “in light of unsolicited interest the Company has received from multiple parties.” The media company rallied last month on reports Paramount Skydance (PSKY) was a potential buyer.

Fed on Deck

This week brings a Federal Reserve meeting on Wednesday. While markets widely anticipate a 25 basis point cut, two other big stories may be at play.

First, Chairman Jerome Powell recently floated the idea of ending “quantitative tightening.” That means the central bank will reinvest dollars from maturing bonds it holds. It essentially increases liquidity and is similar to cutting interest rates (or at least not raising them). Investors will likely be eager for more comments about potentially ending QT.

Second, shelter costs slowed sharply in Friday’s consumer price index (CPI). Owners’ equivalent rent rose at the slowest pace since November 2020. The shelter component accounts for 36 percent of CPI. (It includes owners’ equivalent rent, which accounts for 25 percent of total CPI.) Is the biggest category driving inflation since the pandemic now cooling?

Aside from CPI, at least two reports seemed to confirm the trend:

• Property-analytics firm Cotality noted that single-family house rents had the smallest increase in 15 years. The data was reported by CNBC on Tuesday.
• On Friday, the National Multifamily Housing Council said “high levels of new apartment supply is resulting in slowing rent growth.”

In other words, lingering shelter cost inflation may be easing at the same time policymakers look to end 3-1/2 years of quantitative tightening. That may be viewed as a positive for risk assets like stocks.

Precious Metal Pullback

Gold and silver miners, the leading groups in the market this year, had the biggest drops last week. The declines seemed to result from a reversal of extreme overbought conditions following extended bullish moves.

Consumer staples and utilities were the only major sectors in the red, according to TradeStation data.

Technology, energy and industrials led to the upside. Banks, cybersecurity stocks and solar energy were also strong.

Molina Healthcare (MOH) had the biggest decline in the S&P 500 last week. The health insurer is being squeezed by rising medical costs as states scale back Medicaid enrollment. Congress may also let key Obamacare subsidies expire.

Deckers Outdoors (DECK) fell on weak guidance. The footwear company faces potentially softer demand as management raises prices to offset tariffs.

Netflix (NFLX) dropped after earnings missed estimates and revenue was inline.

Charting the Market

Last week saw the S&P 500 escape a range that held it in check for two weeks. The index also probed 6,800 for the first time before pulling back.

Prices dipped to 6,664 on Wednesday before reversing higher. Holding that level, the close last week and September 19, may suggest buyers outnumber sellers.

The moving average convergence/divergence (MACD) oscillator turned positive. The 8-day exponential moving average (EMA) additionally stayed above the 21-day EMA. Those signals may suggest the market is still trending higher, with few bearish warning signs.

S&P 500, daily chart, with select patterns and indicators.

The Dow Jones Industrial Average also closed above 47,000 for the first time ever.

The Week Ahead

This is the busiest week of earnings season, with more than one-third of the S&P 500’s member stocks announcing quarterly results. There’s also a Fed meeting and potentially more news on U.S.-China trade.

No major events are scheduled for today.

Tomorrow brings consumer confidence, plus earnings from companies like PayPal (PYPL), D.R. Horton (DHI) and Seagate Technologies (STX).

The Fed meeting is at 2 p.m. ET on Wednesday. Chairman Powell holds a press conference 30 minutes later. Boeing (BA) and Caterpillar (CAT) issue results in the premarket. Microsoft (MSFT), Meta Platforms (META) and Alphabet (GOOGL) are slated for the postmarket.

The European Central Bank has a meeting on Thursday morning. Apple (AAPL) and Amazon.com (AMZN) report earnings in the afternoon.

Friday brings results from Exxon Mobil (XOM), Chevron (CVX) and AbbVie (ABBV).