Market Overview
US equities ended Friday’s session with solid gains, driven by a robust rebound in the technology sector amidst renewed optimism regarding OpenAI’s revenue outlook. This recovery enabled major indices to secure weekly gains, offsetting earlier volatility caused by elevated Treasury yields and persistent geopolitical concerns. Oil prices eased following President Trump’s announcement of a Russian diesel supply deal, although underlying Middle East conflict risks continue to warrant investor caution. In a contrasting development, US telecom shares experienced significant declines due to competitive pressures arising from a SpaceX spectrum acquisition. Attention now turns to the impending US earnings season, particularly for major banking institutions.
Markets
Major US stock indices posted solid gains on Friday. The Dow Jones Industrial Average (^DJI) led the advance, closing at 51,654.95, up 0.83% for the day and securing a 0.93% weekly gain. The S&P 500 (^GSPC) rose 0.59% to 7,811.54, with a weekly gain of 1.15%. The technology-heavy Nasdaq Composite (^IXIC) added 0.64% to close at 27,366.17, also advancing 0.64% for the week.
In commodity markets, Brent Crude (BZ=F) traded at $104.72, up 0.42% on Friday, while WTI Crude (CL=F) traded at $91.85, up 0.39%. Both benchmarks saw weekly gains of 2.42% and 0.81% respectively. Gold traded higher, with Gold (GC=F) up 1.43% to 4,216.30. Longer-dated US Treasury yields, which had earlier in the week reached 24-year highs, saw modest movement on Friday, with the 10-Year Treasury (^TNX) standing at 5.244%, up +1.30 bp.
What Drove Markets
US equity markets experienced a rebound on Friday, primarily fueled by the technology sector. Major indices, including the Nasdaq Composite, S&P 500, and Dow Jones Industrial Average, posted gains that helped them achieve weekly advances. This followed a period of volatility stemming from elevated Treasury yields (which had earlier in the week reached new 24-year highs) and an earlier sell-off in AI-linked tech stocks.
Renewed optimism surrounding artificial intelligence served as a key catalyst for tech companies. Reports suggesting OpenAI’s annualized revenue could exceed $70 billion by year-end helped to reverse the previous day’s tech-led downturn. Jesse Marre, Senior Portfolio Manager at Hilbert Group, commented that tech’s rebound was led by reports that OpenAI expects to reach $70 billion in annualized revenue by year-end, which helped alleviate the concerns that had impacted the Nasdaq the previous day. Companies like Microsoft (MSFT), Amazon (AMZN), and Alphabet (GOOG) saw advances. Software stocks such as Palo Alto Networks (PANW), CrowdStrike (CRWD), and Palantir Technologies (PLTR) also gained. However, Adam Crisafulli of Vital Knowledge noted that the prior session’s tech decline reflected extreme positioning imbalances that might still need to unwind, suggesting that a sharp, V-shaped rebound for the entire AI-linked tech complex is unlikely. The discussion around OpenAI’s annualized revenue involved various figures, including $50 billion at the end of September (which reportedly included gross revenue from partners) and a widely reported $68 billion figure last month, with recent expectations for enterprise growth potentially lifting the figure to $70 billion or more by December.
Energy markets reacted to geopolitical developments, with oil prices easing after President Donald Trump announced that Russian President Vladimir Putin agreed to supply diesel to both the U.S. and global markets. This development, which included immediate supplies of over 300,000 tons of diesel, followed by 500,000 tons in November, and 1 million tons immediately thereafter, with Moscow then delivering another 3 million tons of diesel based on the condition of Russia’s refineries, reportedly helped reduce the “war premium” from crude prices. Globally, diesel prices had surged due to Ukraine’s attacks on Russian refineries, Moscow’s ban on diesel exports, and attacks in the Middle East by Iran and its Houthi allies. Jesse Marre, Senior Portfolio Manager at Hilbert Group, noted that President Trump’s statement that the US would not strike Iran before the midterms had taken some of the war premium out of crude. Despite this, the ongoing Middle East conflict remains a significant concern for investors, especially as Trump had stated the U.S. would not attack Iran prior to the midterm elections early next month. Michael Monaghan of Founder ETFs indicated that a more violent, kinetic, or border-expanding war is not currently priced into the market.
The US telecommunications sector faced considerable pressure, with shares of AT&T (T), Verizon (VZ), and T-Mobile (TMUS) experiencing substantial declines. This was attributed to investor worries about increased competition in mobile services following SpaceX’s (SPCX) announcement of a deal to acquire a nationwide spectrum portfolio.
Meanwhile, economic sentiment provided a mixed picture. The University of Michigan’s preliminary October consumer sentiment index fell to 46.3 from 48.1 in September, missing economists’ expectations for a reading of 48. This decline, nearing its record low of 44.8 in May, reflected mounting frustration over living costs and growing concerns about the economic outlook. Investors are anticipating the commencement of the US earnings season next week, with major Wall Street banks expected to report nearly $19 billion in stock-trading revenue.
Stocks to Watch
Several individual stocks made notable moves:
- Microsoft (MSFT) advanced 2.38% to 535.07, Amazon (AMZN) added 3.29% to 262.43, and Alphabet (GOOG) rose 0.87% to 347.86, all benefiting from renewed optimism surrounding OpenAI’s revenue outlook.
- Software stocks Palo Alto Networks (PANW) gained 5.09% to 418.78, CrowdStrike (CRWD) increased 4.57% to 275.04, and Palantir Technologies (PLTR) climbed 5.17% to 209.05.
- In healthcare, Moderna (MRNA) popped 14.21% to 225.00 on optimism surrounding reported National Institutes of Health cancer vaccine efforts. Merck (MRK) jumped 2.26% to 145.60, and Gilead Sciences (GILD) rose 2.77% to 151.17, standing out in the sector.
- Apple (AAPL) slumped 1.11% to 336.64 after reports indicated the company has dialed back iPhone 18 orders due to tepid demand.
- Tesla (TSLA) rose 2.05% to 382.70, contributing to the broader market recovery among megacap technology stocks. NVIDIA (NVDA) gained 0.52% to 229.28.
- T-Mobile (TMUS) plunged 13.27% to 148.58, AT&T (T) fell 10.82% to 1.4224, and Verizon (VZ) dropped 8.75%, all due to investor worries about increased competition from SpaceX’s spectrum acquisition deal.
- SpaceX (SPCX), conversely, rose 1.25% to 162.57 following the announcement of its spectrum acquisition.
- Major Wall Street banks like Goldman Sachs (GS), which reports on Tuesday and was up 1.44% to 895.32, and JPMorgan (JPM), rising 0.47% to 332.99, are in focus ahead of next week’s earnings reports. Goldman Sachs is forecast to post $5.1 billion, Morgan Stanley $4.9 billion, JPMorgan $4.5 billion, and Bank of America $2.6 billion in stock-trading revenue, according to estimates.