Wall Street heads to final week of October with tech earnings, Fed in play
Wall Street is barreling toward a big week ahead with Big Tech earnings, a critical Federal Reserve meeting and an important meeting between President Donald Trump and Chinese President Xi Jinping that could set the tone for the rest of the year. Stocks are on pace to wrap up a strong October next week. On Friday, the Dow Jones Industrial Average closed above 47,000 for the first time, while the S & P 500 topped 6,800 on an intraday basis. The Nasdaq Composite, which is outperforming this month, has now rallied more than 20% year to date. It’s an incredible feat when you consider what the market has had to surmount just this month. An ongoing government shutdown, fears of a trade war between the U.S. and China, the potential for systemic credit risk, a weaker labor market and elevated inflation and seasonal weakness. Next week’s results from five of the Magnificent Seven companies — Alphabet , Amazon , Apple , Meta Platforms and Microsoft — could keep the party going or hurt equities in a big way, depending how profits from the market’s most dominant companies shake out. Together, those five stocks alone account for roughly one quarter of the value of the entire S & P 500 . “Earnings will drive the bus going forward — these five earnings in particular, and then Nvidia , when they report three or four weeks later — they can’t be [overstated] as to the importance as we go into the year end,” said Jay Woods, chief global strategist at Freedom Capital Markets. “Because this will set the table to hopefully run up into the end of 2025, and what we’re expecting going into 2026.” The financial reports next week will decide who are the winners and who are the laggards going forward. Over the past three months, Apple and Alphabet have been the big outperformers, rallying 23% and 35%, respectively. Apple, faced with tariff headwinds and questions around its artificial intelligence strategy, has underperformed this year even as it gained momentum lately. Tim Cook’s $3.9 trillion company will have to prove in its upcoming earnings that the iPhone 17 lineup is unleashing a new product cycle. Similarly, Alphabet’s rally can remain on track so long as earnings growth holds up. Conversely, Amazon, Meta, and Microsoft have lagged the S & P 500 and the Nasdaq Composite over the past three months. Amazon is down 3%, Meta is up 3%, and Microsoft has gained more than 2% while the Nasdaq Composite is ahead more than 10%. All three will have to prove they can meet investors’ robust expectations. “Let’s see if that momentum can continue in the two leaders [Apple and Alphabet] of that group of five, and then the laggards, will they get a catalyst to join the recent party?” Woods said. “Over the last year, they’re doing well, but the pause button has been hit.” Woods expects that the true story of the market could be in the ongoing rotation underneath, such as in healthcare and materials. He said he will keep a careful eye on stocks such as PPG and Sherwin-Williams , as well as United Healthcare . Their results could add to the bullish optimism around earnings, which have already seen a strong start. Of the roughly 145 S & P 500 companies that have reported third-quarter financials thus far, 84% have beaten expectations, according to FactSet data. The blended growth rate for third-quarter profits now stands at 9%. Fed meeting Earnings apart, there are other hurdles to get through, including the Oct. 28-29 Fed meeting. Wall Street is certain of the outcome, with fed funds futures pricing in a quarter-point cut next week in the fed funds rate to 3.75% to 4.00%, according to interest rate futures trading tracked on the CME FedWatch tool. But uncertainty caused by the lack of government economic data due to the shutdown, means what Fed Chair Jerome Powell says in the post-meeting press conference will matter more, in signaling what to expect for the rest of the year. Friday’s softer-than-expected consumer price numbers for September added to the likelihood of a December rate cut as well, but other investors fear that the lack of federal jobs data means the central bank could turn more hawkish in its outlook. That would create a major disappointment for a market that’s counting on two more rate cuts this year, next week and again in December. And if the government shutdown continues, that could weigh on the monetary policy outlook as well “I think by the end of next week, if we don’t have a resolution to the shutdown, it could cause havoc with the market, in [the] sense that the Fed may use the shutdown as an excuse not to make another move because they just don’t have the right data that they want,” Woods said. APEC meeting There’s also the Asia-Pacific Economic Cooperation (APEC) forum in South Korea next week, where Trump and Xi are scheduled to meet. Any good news from the meeting could boost the stock market. Just this month, Wall Street suffered a rude awakening, with the Dow dropping nearly 900 points on Oct. 10 , following a Truth Social post from Trump that escalated tensions between the two countries, before another post two days later relieved investors. It was a reminder that the trade war between the world’s two largest economies remains a threat to the status quo. If Wall Street can get through those talks, and past all the hurdles of the coming week, many investors expect the bullish underpinnings of the market will resume their control. They expect that strong earnings, a resilient economy and lower interest rates can push stock prices higher. But a near-term pullback isn’t out of the question either. Investors, mindful of the vulnerabilities of an expensive market, with signs of froth forming in more speculative corners such as meme and quantum computing stocks, are rebalancing their portfolios, and adding exposure to defensive sectors that look more attractive after lagging in 2025. Healthcare, for one. Materials, for another. Even consumer discretionary companies, possibly, if the consumer manages to keep spending even with higher inflation. But if all goes well, a selloff could set the stage for further gains in the market. Woods said he expects the S & P 500 could top 7,000 as the market heads into the holidays. “Next week is one of those weeks you [have] got to buckle up and put the helmet on, because it could be very interesting,” Woods said. Week ahead calendar All times ET. Monday, Oct. 27 Earnings: Waste Management , Universal Health Services , Nucor , Alexandria Real Estate Equities , Keurig Dr Pepper Tuesday, Oct. 28 Earnings: Mondelez International , Edison International , Electronic Arts , Booking Holdings , Visa , PPG Industries , Sysco , Ecolab , Hubbell , Sherwin-Williams , Invesco , American Tower , A.O. Smith , Labcorp , Regeneron Pharmaceuticals , United Parcel Service , UnitedHealth Group , Royal Caribbean Group , PayPal Holdings , NextEra Energy , IQVIA Holdings , Corning , D.R. Horton Wednesday, Oct. 29 2:00 p.m. FOMC Meeting 2:00 p.m. Fed Funds Target Upper Bound Earnings: MGM Resorts International , ServiceNow , Chipotle Mexican Grill , Starbucks , Public Storage , Align Technology , Tyler Technologies , Prudential Financial , Microsoft , Meta Platforms , KLA , Invitation Homes , Alphabet , Extra Space Storage , eBay , AvalonBay Communities , Boeing , Phillips 66 , Kraft Heinz , Verizon Communications , CVS Health , Caterpillar , Old Dominion Freight Line , Generac Holdings , GE Healthcare Technologies , Automatic Data Processing Thursday, Oct. 30 Earnings: Apple , Edwards Lifesciences , Gilead Sciences , Monolithic Power Systems , Amazon , Western Digital , Motorola Solutions , Ingersoll Rand , GoDaddy , First Solar , DexCom , Coinbase Global , Kellanova , Ameriprise Financial , S & P Global , Huntington Ingalls Industries , Baxter International , Altria Group , Howmet Aerospace , Hershey , Comcast , Bristol Myers Squibb , Kimco Realty , Eli Lilly , Estee Lauder Companies , Merck & Co. , Kimberly-Clark , Cigna Group , Vulcan Materials , Quanta Services , Mastercard , L3Harris Technologies , International Paper , DTE Energy , Cardinal Health , Biogen Friday, Oct. 31 Earnings: Dominion Energy , T. Rowe Price Group , Charter Communications , Exxon Mobil , Chevron , Colgate-Palmolive , AbbVie
