Stocks are moving sideways as investors wait for news on tariffs, the economy and earnings.
The S&P 500 rose 1.7 percent between Friday, October 10, and Friday, October 17. All the movement occurred within the previous week’s large range. More than two-thirds of the index’s members — and every major sector — advanced.
Several headlines lifted individual stocks. Grain processor Bunge (BG) rallied after cutting guidance less than feared and President Trump threatened to block Chinese cooking oil. Trucking company J.B. Hunt Transport Services (JBHT) jumped after cost cuts and a business-improvement plan pushed results ahead of estimates. Both BG and JBHT had their best weeks since 2001.
Large growth stocks mostly advanced, although Alphabet (GOOGL) was the only trillion-dollar company to hit a new high. Taiwan Semiconductor (TSM), which manufactures for big chip companies like Nvidia (NVDA), tried to rally on strong results. However traders sold into the strength and cut its weekly gain from 10 percent at the high to 5.1 percent.
Trade and China
Biggest Gainers in the S&P 500 Last Week
Bunge (BG)
+21%
J.B. Hunt Transport Services (JBHT)
+20%
Estee Lauder (EL)
+15%
On Semiconductor (ON)
+15%
Best Buy (BBY)
+13%
Source: TradeStation data
Last week saw more drama between the White House and Beijing, although developments seemed to trend in a positive direction.
Trump initially said, “don’t worry about China, it will all be fine.” Later in the week he downplayed previous threats of 100 percent tariffs on China as “unsustainable.”
More news could follow this week with Treasury Secretary Scott Bessent planning to meet Vice Premier He Lifeng in Malaysia.
The clock is ticking ahead of a November 10 deadline. That’s when hefty tariffs, announced in April, could take effect. (They were paused in May after an earlier negotiation between Bessent and He.)
Investors are also hoping for confirmation that Trump will have a formal meeting with Chinese President Xi Jinping at the APEC 2025 summit in South Korea on October 31 and November 1.
Good Bank, Bad Bank
Major financials including JPMorgan Chase (JPM), Bank of America (BAC), Morgan Stanley (MS) and Wells Fargo (WFC) reported better-than-expected quarterly results. Broadly speaking, areas like investment banking, trading and wealth management were strong. However the traditional-banking business saw increased provisions for bad loans as borrowers’ credit quality declined.
Credit worries mostly focused on regional lenders after Zions Bancorp (ZION) took a $60 million provision associated with potential fraud.
“When you see one cockroach, there are probably more,” JPM CEO Jamie Dimon said on his company’s conference call. He added that “quite a few more credit issues” could emerge if the economy slows.
Biggest Decliners in the S&P 500 Last Week
F5 (FFIV)
-9.3%
Marsh & McLennan (MMC)
-8.4%
Brown & Brown (BRO)
-8.4%
Kenvue (KVUE)
-8.2%
Fastenal (FAST)
-7.3%
Source: TradeStation data
Financials were the weakest sector overall last week with a gain of less than 0.1 percent. Property and casualty insurance companies like Marsh & McLennan (MMC) and Brown & Brown (BRO) fell as investors focused on the risks of slowing premium increases and higher costs.
Rates Move Lower
Concerns about bank loans depressed interest rates, pushing the yield on the 10-year Treasury note to its lowest closing level in more than a year last Thursday.
Federal Reserve Chairman Jerome Powell also broached the topic of reducing “quantitative tightening,” or QT. That means the central bank could start reinvesting money from its assets, which could have a net stimulus effect on the economy.
“The labor market has actually softened pretty considerably,” he said in a speech on Tuesday. “The downside risks to employment appear to have risen.”
Sectors that typically benefit from lower rates, like utilities and real estate investment trusts, advanced.
Other strong groups last week included precious metals, semiconductors and emerging markets.
A pair of consumer-focused stocks that have lagged in recent years jumped:
Estee Lauder (EL) rallied after Goldman Sachs upgraded the cosmetics company from hold to buy. The analyst cited improving business trends, especially in China.
Best Buy (BBY) climbed on hopes that trade uncertainties involving China will be solved soon.
F5 (FFIV) had the biggest drop in the S&P 500 last week after the cybersecurity company acknowledged a cyberattack. Fastenal (FAST) declined on lower-than-expected earnings.
Charting the Market
The S&P 500 may be showing signs of slowing after six months of steady gains.
The moving average convergence/divergence (MACD) oscillator is falling and prices spent all of last week below their 10-day moving average. Those signals may reflect weakening momentum.
The index is between October 10’s low of 6,551 and the same day’s peak at 6,761. Traders may look for big announcements involving tariffs or earnings to trigger a move outside that zone.
Cboe’s volatility index climbed to its highest level in almost six months on Friday before reversing. That could also suggest sentiment is getting less bullish.
S&P 500, daily chart, with select patterns and indicators.
The past month has also seen outperformance in safe-havens like utilities, consumer staples and health care. Meanwhile economically sensitive sectors like energy, financials and industrials have lagged. Is the market worried about growth?
The Week Ahead
Earnings reports get more active this week. Some 85 members of the S&P 500 issue results, followed by more than 100 in each of the two following weeks.
Economic reports remain quiet because of the government shutdown. There could also be market-moving news involving trade talks with China.
The first big numbers arrive tomorrow, with companies like General Motors (GM) and Coca-Cola (KO) in the premarket. Netflix (NFLX) and Texas Instruments (TXN) report in the afternoon.
Tesla (TSLA), Lam Research (LRCX), International Business Machines (IBM), GE Vernova (GEV) and Southwest Airlines (LUV) announce results on Wednesday. Crude-oil inventories are also due.
Ford Motor (F), Intel (INTC), Newmont (NEM) and Freeport McMoRan (FCX) and American Airlines (AAL) report on Thursday.
September’s consumer price index (CPI) is scheduled for Friday morning. The important inflation report is nine days late because of the shutdown. Procter & Gamble (PG) will issue results.