Reluctant Bulls Fuel Wall Street’s Rally 28/10/2025

HOT stories for today

Market wrap:

• U.S. stocks climbed Monday, with investors bracing for a packed week of megacap earnings and a Federal Reserve decision that markets see as all but settled. Gold slipped as easing tensions between the U.S. and China tempered demand for havens. Over the weekend, officials from both sides laid the groundwork for Thursday’s meeting between Presidents Xi and Trump. Rare-earth shares retreated after Beijing postponed its export licensing rollout amid ongoing negotiations. Meanwhile, Trump imposed new tariffs on Canada following a dispute over a weekend ad from Ottawa.
• Qualcomm led gains, surging after unveiling plans for a new generation of AI chips slated for 2027. After the close, Nextera and Google announced a joint project to revive a decommissioned nuclear power plant in Iowa, with the plant expected to come online by 2029. In Asia, markets mostly slipped ahead of the Trump–Takaichi meeting in Japan. Futures were steady, with Dow contracts up 15 points, S&P 500 futures little changed, and Nasdaq 100 futures rising 0.1%. Amazon shares were in focus after reports that it will begin its largest-ever round of layoffs on Tuesday, adding to the wave of job cuts sweeping the tech sector this year. Visa will release earnings after market close.

Reluctant Bulls Fuel Wall Street’s Rally

• U.S. stocks keep setting records even as investors remain uneasy, creating what Citigroup’s Scott Chronert calls a “classic wall of worry.” The strategist said client discussions revealed persistent concerns about valuations, AI exuberance, credit, and the labor market, yet portfolios remain heavily weighted toward large-cap U.S. equities. Citigroup’s Levkovich Index shows “positioning euphoria,” near levels last seen during the tech bubble and post-pandemic rally. Chronert said investors appear to be “reluctant bulls,” quick to buy on good news but ready to sell at the first disappointment.
• The S&P 500 closed at 6,855 on Monday, surpassing Citi’s 6,600 year-end target, implying a 22.7x forward multiple,  above long-term averages. The bank’s bull case of 7,200 would require stronger 2026 earnings and a higher valuation. Volatility remains muted, with the VIX near 16, though Chronert expects it to rise as the bull market matures. He added that foreign investors remain anchored to U.S. stocks, which make up 63% of the MSCI All Country World Index.

Stocks on the move:

• NXP Semiconductors (NXPI): Shares rose 2% after Q3 results beat estimates and guidance topped forecasts. Revenue was $3.17 billion versus $3.16 billion expected, with EPS of $3.11 matching projections. The company guided Q4 earnings between $3.07 and $3.49 a share.
• Universal Health Services (UHS): Gained 5.6% after earnings and outlook exceeded estimates. Q3 EPS was $5.69 on $4.5 billion in revenue, beating forecasts of $4.88 and $4.34 billion.
• Nucor (NUE): Added 3% as Q3 EPS of $2.63 topped guidance and revenue hit $8.52 billion versus $8.18 billion expected. The company warned Q4 results will likely soften.
• F5 (FFIV): Fell more than 6% after weak guidance and a recent China-linked cyberattack. Full-year EPS forecast of $14.50–$15.50 and 0%–4% revenue growth trailed estimates.
• Cadence Design Systems (CDNS): Dropped 1.6% on softer Q4 guidance, projecting $1.41–$1.44 billion in revenue. Q3 EPS of $1.93 on $1.34 billion still beat expectations.

Watchlist: FFIV, CAR, NUE, UHS, NXPI, AMZN, PYPL, SOFI, UNH, RCL

Key Economic Events Today:

EST time

10:00 am: USD Richmond Manufacturing Index


Earnings

BMO (Before Market Open): PayPal Holdings ($PYPL), SoFi Techs ($SOFI), UnitedHealth Group ($UNH), Royal Caribbean Gr ($RCL), United Parcel Service ($UPS), and JetBlue Airways ($JBLU)

AMC (After Market Close): Visa ($V), ContextLogic ($LOGC), Enphase Energy ($ENPH), and Electronic Arts ($EA)

The TEFS Analyst team wishes you a successful day!