Weekend Update, October 6th, 2025
Index, Sector, and Asset Performance
Stocks in Asia ended higher Monday (ex-China) led by strong gains in Japan +4.8% following the election of Senae Takaichi. This morning, Advanced Micro Devices (AMD) won a huge AI chip order from OpenAI, sending the stock soaring over 20%. AMD expects the deal to generate tens of billions of dollars in new revenue over the next 5 years.
The S&P 500 finished the week at 6715, a record high while on a six-day winning streak even with the federal government being shut down. The S&P 500 made three new all-time highs last week, all coming after the shutdown. 3Q25 ended last week with the S&P 500 hitting 23 records as it climbed +7.8%.
A word of optimism for what is normally a seasonally strong 4th quarter. Per FundStrat, since 1950, stocks have gained an average of +4.9% in the period from October through December, with a win ratio of 81%. For comparison, in both 1998 and 2024, the Federal Reserve cut rates in September after having been on pause, just as we’ve seen this year. The average Q4 gains in those precedent years is +13.8%.
The US 10-year Treasury yield is at about 4.1%.
The discussion around “bad market breadth” or “it’s only 7 stocks” remains faulty. The 3 month rolling A/D Line has now pushed higher, confirming a new high in participation.
Economic Indicators and Earnings Commentary
The Federal government is shutdown. The flow of U.S. data dried up on Wednesday in the wake of the shutdown. Markets interpreted the data in the two days before and after the private-sector reports as supporting the case for more rate cuts to end the year. Weaker job markets in September were the two ISM employment metrics with sub-50 readings, ADP with a -32,000 print for private payrolls, and the Conference Board’s hefty deterioration. This data has trumped the developments pointing to sticky inflation. Two ISM prices paid metrics are running in the 60s range along with new tariffs on lumber, cabinets, and upholstered furniture.
Government shutdowns historically have not been issues for equity markets. The last 50 years, there have been 21 shutdowns. 3 months afterwards, the S&P 500 was up +3% on average, with a 67% hit rate. After 12 months, the S&P 500 was up 90% of the time, with an average return of +12% for all 21 shutdowns.
Later this week, the major data release is the Minutes from the September 16-17 FOMC meeting. This should get more attention than usual, as markets are searching for rate cuts in the months ahead. Markets are calling for two more interest-rate cuts in 2025. There is a 98% chance of a 25 basis-point (bp) cut in October and a 90% chance of a 25-bp cut in December.
US Treasuries, particularly shorter-term rates, have generally performed well across rate-cutting cycles, rallying both before and after rate adjustments.
Earnings: Financials including C, JPM, and WFC will report next Tuesday, October 14th. By October 31st, 68% of S&P 500 companies representing 72% of market cap will have reported results. NVDA, the largest company in the market, is scheduled to report on November 19th.
The Earnings reporting Tsunami is forthcoming per Goldman. Being mid-year seasonality, earnings growth should decelerate relative to last quarter due to smaller currency tailwinds, higher tariff payments, and one-time charges that boosted year/year growth in 2Q. That said, Wall Street analysts increased their Q3 earnings estimate for the S&P 500 during the quarter for the first time since post Covid 2021.
Commodities and Currencies
Oil rallied last week on geopolitical fears, looks like it has finally troughed, and could be the surprise moving higher over the next 6 months.
The US dollar remains essentially flat since Tax Day.
Gold hit new ATHs at $3850
Bitcoin minted a new ATH over the weekend more than $125,000.
Oak Harvest Weekly Stock Talk
Terms of Endearment and Endangerment
Past performance is no guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. The preceding discussion is for informational purposes only. Investing involves risk and no reference to any security listed above should be considered a buy or sell recommendation. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser.
