Back to top

View the PFP Archive

Stocks closed higher yesterday with all of the major indexes in the green.
Kevin Matras   
Profit from the Pros
By Kevin Matras
Executive Vice President
Zacks Investment Research
  

Stocks Up As AI Rally Reignites On Anthropic IPO Enthusiasm

Stocks closed higher yesterday with all of the major indexes in the green.

As I mentioned last week, the selloff in tech seemed overdone. And the bounce was overdue.

Yesterday's IPO filing by Anthropic reignited investor enthusiasm around the AI trade.

Also adding to the positive tone yesterday was a drop in oil. While oil is still above $100, it dropped nearly -2% yesterday. (More oil is coming out of the Middle East now (roughly 24 million barrels a day as of last week), than before the war began.)

And Treasury yields were mostly lower with the 10-year closing at 4.986%. Yields have been falling for the last week and a half. It's down more than -11 basis points from the previous week's close of 5.098%. And down more than -35 bps from the high of 5.349% from the week prior to that.

The Fed makes their next announcement on rates this week on Wednesday, 10/28. At the moment, the odds are at 90.6% that the Fed keeps rates unchanged. Especially with midterms less than 2 weeks away. The expectation is still for one more rate hike at their last meeting of the year on December 9th. But that's not a done deal. Nonetheless, those are the expectations.

What could influence the Fed's December decision on rates will be more data on inflation. And we'll get another look at inflation on Thursday with the Personal Consumption Expenditures (PCE) index, which is the Fed's preferred inflation gauge.

But before that, it's all about earnings.

This week we'll hear from three Magnificent 7 stocks, with Alphabet and Microsoft reporting on Wednesday, and Amazon going on Thursday.

But there's more than just tech on the earnings calendar this week. All in all, we'll hear from another 877 stocks on deck to report this week, including non-tech marquee names like Coca-Cola, Boeing and Visa reporting today.

In other news, yesterday's Chicago Fed National Activity Index came in at 0.07 for the month of September vs. -0.08 in August and views for -0.1.

And the Dallas Fed Manufacturing Survey came in at 13.4 vs. last month's 9.8 and estimates for 7.0. The Production Index was at 15.8 vs. last month's 29.5.

Today we'll get the Durable Goods Orders report, the Case-Shiller Home Price Index, New Home Sales, the Richmond Fed Manufacturing Index, and Consumer Confidence.

Only 4 more trading days left in the month. At the moment, the S&P is in the green for October. Same for the Dow. But the Nasdaq still has some work to do.

While October has been a mixed bag so far, October is typically the best month for stocks in midterm years. The gain averages 3.0%. (And November is close behind with 2.7%. And both have win ratios of greater than 70%, with October up 73.7% of the time and November up 78.9% of the time.) And I'm expecting more gains to come as the month comes to a close.

But the bullish seasonality doesn't end there. The fourth quarter is historically the best quarter of the year. Since 1950, the S&P has gone up 79% of the time, with an average gain of 4.1%. So, regardless of how October pans out (although I'm still expecting a gain), the odds are in our favor for a strong end-of-year rally.

And with it all taking place against the backdrop of the AI boom -- the most transformational technological breakthrough ever -- I'm expecting a lot more upside to go.

See you tomorrow,

, Zacks Investment Research

Most Popular Articles from Zacks.com

Image: Shutterstock

AI Headlines Pile Up as Wall Street Navigates a Volatile Week

The AI infrastructure boom, substantial fiscal spending and relatively abundant liquidity continue to provide important support for economic activity and corporate earnings. Read More »

Image: Shutterstock

News Failure: Neocloud Stocks Defy Musk's Warning

While tighter debt markets and heavy Capex pose a real hurdle for pure-play Neoclouds, market history suggests the worst fears may already be priced in. Read More »

Image: Bigstock

Anthropic IPO 2026 Guide: Price Predictions, Dates, and Everything You Need to Know

Anthropic's public debut may become one of the most important tests yet of whether public-market investors are willing to support trillion-dollar AI valuations. Read More »

Image: Bigstock

Don't Miss This Week's 5 Most Important Earnings Charts

Microsoft, Alphabet, Vertiv, Sandisk, and Eli Lilly are all must-see charts. Read More »

IImage: Bigstock

Cybersecurity ETFs in Spotlight as AI's Black October Unfolds

AI-discovered vulnerabilities during "Black October" have put cybersecurity ETFs in the spotlight, with four funds posting gains up to 63.9% year to date. Read More »

Sponsor

Increase Investment Returns with Free Zacks' Portfolio Tracker

Catch breaking news on your stocks and funds at a glance, including timely recommendation changes ... Zacks Ranks ... Industry Ranks ... earnings announcements ... earnings estimate revisions ... and more. And now you can screen for new stocks to improve portfolio performance.

Click for Free Tracker & Screener »

Image: Shutterstock

Bull of the Day: Taiwan Semiconductor Manufacturing Company (TSM)

TSMC is projected to more than double its earnings between 2025 and 2027. Read More »

New Zacks Strong Buys for October 27th

Here are 5 stocks added to the Zacks Rank #1 (Strong Buy) List today. Read More »

 

Download our app for convenient on-the-go access to even more—daily and weekly newsletters published by Zacks experts, proprietary research and tools, and Portfolio Tracker on Zacks.com.

Download our Zacks App for Apple iOS
Download our Zacks App for Android

Visit Success Stories to hear how Zacks research, tools and portfolios help our members outperform the market.