Market Recap - Monday, October 27, 2025
Markets Rise on U.S.–China Trade Hopes and AI Optimism Ahead of Big Tech Earnings
Markets kicked off the week on a strong note, with all major indexes finishing higher. The S&P 500 rose 1.2%, the Nasdaq jumped 1.9%, and the Dow gained 0.7%, closing near the day’s best levels. Tech stocks led the way again, as investors remain upbeat heading into a massive week of earnings from the market’s biggest names.
What Drove the Market Today
It was a relatively quiet day for news, but optimism picked up after weekend headlines signaled progress in U.S.-China trade talks. Reports say a “framework” deal is in place to prevent new tariffs, with Presidents Trump and Xi set to meet Thursday during the APEC summit. While details are still vague, the market liked the idea of de-escalation.
Meanwhile, excitement continues to build around AI, with Qualcomm (QCOM) announcing a new AI chip for data centers, directly taking on Nvidia and AMD. That helped spark a rally across chipmakers and tech stocks more broadly.
Investors are also watching the Federal Reserve, which is expected to cut rates again this week — and possibly signal an end to its bond-selling (QT) program. Between Fed easing, strong corporate earnings, and seasonal tailwinds, the bullish sentiment remained intact.
Sectors & Stocks to Know
Winners:
Tech surged, led by Qualcomm (+11.1%) after unveiling its new AI chip, and Google (GOOGL) and Tesla (TSLA) also posted strong gains.
M&A deals were hot: Novartis is buying Avidity Biosciences (+42%) for $12B; Huntington Bancshares is acquiring Cadence Bank (+4.4%); and Janus Henderson jumped +11% on a buyout offer.
Consumer names like Keurig Dr Pepper (+7.6%) beat earnings, while lululemon (+1.8%) gained on NFL apparel news.
Lagging:
Intellia Therapeutics (-42%) dropped after pausing trials due to safety concerns.
Organon (-23%) slumped following CEO resignation and audit issues.
Amazon (-0.6%) fell slightly after news it plans to cut up to 30K corporate jobs, reflecting a broader softening in the labor market.
What’s Ahead
Next week is peak earnings season with five of the Mag 7 tech giants — including Google, Microsoft, Meta, Apple, and Amazon — set to report. Together they represent $15 trillion in market cap, and their results will be key to keeping the rally alive.
Also on tap:
Fed rate decision on Wednesday (another 25 bp cut expected)
Possible end to quantitative tightening
Consumer confidence, housing data, and more treasury auctions
Here’s Our Take
Despite a lack of major headlines, markets powered higher on optimism around U.S.-China trade de-escalation and excitement heading into the busiest week of earnings season. The AI theme continues to dominate, with Qualcomm’s chip news adding fuel to the fire. Meanwhile, the Fed remains in the spotlight, and markets are betting on another rate cut and potentially the end of QT.
That said, cracks are starting to appear in the labor market, with Amazon, Target, Meta, and others announcing job cuts. It’s a reminder that under the surface, corporate America is tightening up. But for now, investors are focused on earnings, AI, and the Fed — three pillars keeping this rally going into year-end.
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