Stock Market Today - Dow, S&P 500, and Nasdaq Climb as Earnings, AI Growth, and Gold Strength

Wall Street Rebounds Sharply as Earnings and Rate-Cut Hopes Drive Buying

U.S. equities surged as investors shook off trade tensions and focused on corporate strength and monetary easing prospects. The Dow Jones Industrial Average (^DJI) rose 202.88 points (+0.44%) to 46,270.46, the S&P 500 (^GSPC) gained 0.70% to 6,644.31, and the Nasdaq Composite (^IXIC) advanced 0.97% to 22,521.70. Futures were strong throughout the morning, with Nasdaq 100 futures (NQ=F) up nearly 1%, S&P 500 futures (ES=F) rising 0.7%, and Dow futures (YM=F) adding 0.39%. The rebound came after a turbulent session when the Dow erased a 600-point drop to close up 200 points, marking its biggest intraday comeback since April. The VIX index dropped to 19.45, reflecting easing volatility, while the 10-year Treasury yield slid to 4.02%, its lowest in weeks. Federal Reserve Chair Jerome Powell signaled that “downside risks to employment have risen,” strengthening expectations for another quarter-point rate cut later this month. Markets have now priced a 95% probability of a December cut, underscoring a broader shift toward policy accommodation.

Bank Earnings Lift Sentiment: Bank of America (BAC) and Morgan Stanley (MS) Outperform

Financials drove the early rally as major Wall Street banks delivered powerful results. Bank of America (NYSE:BAC) jumped 4.08% to $52.20 after reporting $8.47 billion in profit for the third quarter, a 23% increase year-over-year and nearly $1 billion above estimates. EPS came in at $1.06, beating expectations of $0.95, while revenue rose to $28.24 billion from $27.5 billion expected. Investment banking fees surged 43% to $2 billion, fueled by dealmaking activity, while trading income rose 8% to $5.3 billion. CEO Brian Moynihan highlighted that “every business line posted both top- and bottom-line growth,” emphasizing the resilience of the bank’s core operations. Morgan Stanley (NYSE:MS) added 2% after posting $2.80 EPS on $18.22 billion in revenue, well above estimates of $2.10 and $16.7 billion. Strength across its wealth management and trading divisions powered the beat, with management noting a rebound in M&A pipelines. These results, combined with earlier strong reports from Goldman Sachs (GS) and Wells Fargo (WFC), reinforced confidence in the banking sector’s stability amid a high-rate environment.

Tech and AI Stocks Surge: Nvidia (NVDA), AMD (AMD), and ASML (ASML) Lead Nasdaq Higher

Technology and semiconductor names dominated gains as investors rotated back into growth. Nvidia (NASDAQ:NVDA) rose 2.65% premarket to $184.78 after HSBC (HSBC) upgraded the stock to Buy with a price target of $320, up from $200, citing rising demand for AI chips beyond hyperscalers. Momentum strengthened after the Artificial Intelligence Infrastructure Partnership (AIP) — a consortium including Nvidia, BlackRock (BLK), Microsoft (MSFT), and Elon Musk’s xAI — announced plans to acquire Aligned Data Centers in a $40 billion deal, signaling deeper integration across AI infrastructure. Advanced Micro Devices (NASDAQ:AMD) climbed 2.3% to $223.10 after Oracle (ORCL) said it would deploy more than 50,000 AMD AI chips in its data centers, expanding AMD’s presence in enterprise-grade hardware. ASML Holding N.V. (NASDAQ:ASML) advanced 4.8% to $1,030 following a strong earnings report, posting €5.4 billion in net bookings versus €5.36 billion expected. CEO Christophe Fouquet highlighted “robust AI-related equipment demand” while warning that Chinese sales, which made up nearly half of 2024 revenue, could decline significantly next year due to export restrictions.

Luxury and Consumer Stocks Strengthen: LVMH (LVMUY) and Dollar Tree (DLTR) Impress

The consumer sector saw a broad recovery, led by luxury names and discount retailers. LVMH (OTCPK:LVMUY) gained 9% in U.S. trading and 14% in Paris after posting a 1% organic sales increase in the third quarter, breaking two quarters of declines. Growth returned across all divisions, with particular strength in Asia, where spending from Chinese consumers showed early signs of rebound. Analysts described the results as a pivotal shift for the global luxury segment, lifting peers Kering (PPRUY), Hermès (HESAF), and Prada (1913.HK) by 5% to 9%. Dollar Tree (NASDAQ:DLTR) climbed 8% to $100.31 after forecasting 10% annual EPS growth through 2028 and “high-teens” growth in fiscal 2026. CEO Mike Creedon outlined plans to focus on higher-margin products and operational efficiency following the $1 billion sale of its Family Dollar chain, a sharp markdown from the $9 billion purchase price a decade ago. Despite lingering tariff risks, traffic gains and cost controls boosted investor sentiment.

Safe-Haven Surge: Gold (GC=F) Breaks Records While Oil (CL=F) Softens

Commodities moved in opposite directions as gold rallied and oil slipped. Gold (GC=F) soared 1.18% to a record $4,212.70 per ounce, its highest ever, as investors sought refuge amid trade tensions and falling yields. Spot silver also touched $53.54, setting a new all-time high before paring gains. Analysts at Société Générale raised their gold target to $5,000 per ounce, citing strong ETF inflows and persistent central bank buying. In contrast, WTI crude oil (CL=F) declined to $59.27, pressured by oversupply and softer demand expectations. The International Energy Agency (IEA) projected a global surplus approaching 4 million barrels per day in 2026, underscoring a bearish medium-term outlook.

U.S.-China Trade Tensions Resurface as Policy Risks Intensify

Trade friction returned to the spotlight after President Donald Trump threatened a cooking oil embargo against China in response to Beijing halting U.S. soybean purchases. The threat rattled agricultural markets, lifting Bunge Global (BG) by 6.18% to $87.50 and Archer-Daniels-Midland (ADM) by 3%. The move followed China’s sanctions on five U.S. subsidiaries of Hanwha Ocean, escalating tensions ahead of the APEC Summit in South Korea later this month. U.S. Trade Representative Jamieson Greer warned tariffs as high as 100% could take effect by November 1, depending on China’s response. JPMorgan analysts expect a temporary truce when Trump and Xi Jinping meet but warned that unresolved trade and technology restrictions could cause fresh market disruptions, particularly in semiconductor supply chains.

Market Bubble Fears and Overheating Concerns

Warnings of a potential AI-driven market bubble grew louder across Wall Street. JPMorgan CEO Jamie Dimon said “elevated asset prices remain a serious concern,” while Paul Tudor Jones labeled the rally “Bubble 2.0,” suggesting it could surpass the scale of 1999. The Buffett Indicator, comparing total market capitalization to U.S. GDP, now stands above 210%, exceeding the 140% peak seen during the dot-com boom. Despite these warnings, Wedbush’s Dan Ives argued that the market remains in a “1996 stage, not 1999,” implying that the AI cycle has room to expand before peaking. Analysts noted that valuations are stretched, but strong earnings and liquidity continue to support risk appetite.

Outlook: Momentum Holds but Risks Accumulate

Markets enter the final stretch of October with solid tailwinds from earnings and monetary expectations, yet structural risks remain. Corporate results have broadly exceeded expectations, the Fed appears inclined toward easing, and AI investment is accelerating. However, trade escalation, elevated valuations, and investor euphoria threaten to disrupt the rally. The Dow and S&P 500 trade near record highs, while the Nasdaq continues to benefit from AI momentum. With gold breaking new ground and volatility subdued, sentiment remains cautiously bullish. For now, equities appear positioned for continued upside, but the combination of geopolitical uncertainty and overextension warrants vigilance as Wall Street navigates this high-stakes rally.

That's TradingNEWS