The US equities market delivered another robust performance during the week of October 27-31, 2025, marking the third consecutive week of gains and extending a six-month winning streak. Major indices posted solid advances, with the technology-heavy Nasdaq leading with gains of 2.3%, while the S&P 500 climbed 0.7% and the Dow Jones rose 2.2%. Small-cap stocks did not follow the trend, with the Russell 2000 declining approximately 1.4%, suggesting investors continued to favor large-cap growth stories over smaller companies.
The week's gains were primarily fueled by a strong third-quarter earnings season, particularly from technology giants within the "Magnificent Seven" group. Amazon and Apple delivered good results that exceeded expectations, driven by robust demand for AI and cloud services, which helped offset weaker performances from Microsoft and Meta, whose elevated capital expenditure guidance raised some investor concerns. The Fed's anticipated 0.25% rate cut provided additional support, though Chair Powell's cautious commentary about future December cuts created mid-week volatility and pushed Treasury yields modestly higher.
Market momentum received further support from cooler-than-expected September inflation data, which reinforced investor confidence that the Fed's rate-cutting cycle could continue despite Powell's measured tone. But most significantly, was the news of a one-year trade truce between the US and China, involving a pause on certain tariffs and framework for potential broader agreements, helping to ease geopolitical tensions and improved overall risk appetite.
