TQ Morning Briefing

Markets Steady as Cease-Fire Lifts Risk Tone; AI Trade Cools, Gold Holds $4,000

From the T&Q Desk

Stocks paused Thursday following a record-setting week, with investors digesting geopolitical breakthroughs, a shifting Fed tone, and the first signs of valuation fatigue in the AI complex.

The S&P 500 and Nasdaq both edged lower after touching fresh highs earlier in the session, while small- and mid-caps underperformed. Industrials, materials, and energy led the pullback, offsetting late gains in technology that limited the Nasdaq’s losses.

The day’s tone was shaped less by data and more by narrative. Israel’s cease-fire with Hamas, brokered by U.S. and regional mediators, eased global risk tensions and sent oil lower, while investors rotated toward havens like gold and Treasurys.

At the same time, questions about AI sustainability reemerged after a week of mixed headlines,  including renewed scrutiny of OpenAI’s trillion-dollar data center plan and warnings from veteran traders about overheating valuations.

Bond yields ticked higher, with the 10-year Treasury closing near 4.15%. Fed officials, including Vice Chair Michael Barr, signaled caution on further rate cuts, saying inflation risks remain “significant” even as labor conditions soften.

Markets continue to price in one to two more cuts this year and another round early in 2026, but the divergence between investor optimism and Fed rhetoric is widening, a tension that could define the next leg of the rally.

Premier Feature

Nvidia's Worst Nightmare?

Instead, it could be this overlooked $20 company that's already won NASA's trust

…and is positioned to dominate the potential $2 trillion quantum computing explosion. 

Word Around the Street

Futures are mostly flat Friday morning ahead of the open, with traders balancing relief from the Gaza cease-fire against lingering shutdown uncertainty and central-bank crosscurrents.

The dollar extended gains for a fifth straight session, supported by political turbulence in France and Japan’s leadership change, while gold stabilized near $4,000 after a sharp midweek selloff.

Investor focus turns next to earnings season, which begins next week with major banks. Analysts expect S&P 500 profits to rise roughly 10% year-over-year, the fourth straight quarter of double-digit growth, as margins remain resilient despite a slowing labor backdrop.

With government data delayed by the shutdown, corporate results will serve as the market’s most reliable read on growth and consumer strength.

Sentiment remains firm: the NAAIM Exposure Index climbed to 84.6 from 80.7, and the AAII bull-bear spread widened to +10.3 as bulls reached 45.9%. 

The S&P 500 has now gone 32 consecutive sessions without a 1% move, the longest streak since 2019.

Global Policy Watch

Central banks are entering a delicate phase as policy independence faces renewed scrutiny and the line between economics and politics blurs.

Bostic’s comments follow Vice Chair Michael Barr’s caution that inflation “faces significant risks” and that the central bank must avoid moving too quickly. Together, their remarks underscore a more nuanced tone inside the Fed, where several policymakers now acknowledge uncertainty over the labor outlook and the true neutral rate.

The Federal Reserve’s next decision on October 29 is complicated by the government shutdown, which has halted official economic data releases. 

Without CPI, payrolls, or retail-sales figures, policymakers will rely on private-sector estimates and anecdotal data from regional contacts, raising the risk of policy missteps in either direction.

Across markets, the message is clear: monetary policy is becoming as much about legitimacy and coordination as about rates themselves, a shift that could redefine how central banks manage both credibility and crisis in the next cycle.

Trade Winds & Global Shifts

Middle East Cease-Fire:
Israel and Hamas agreed to a 72-hour cease-fire beginning Friday noon local time, initiating troop withdrawals and setting the stage for hostage releases. U.S. Central Command will help coordinate an international stabilization force alongside Egypt, Qatar, and the UAE.

The breakthrough, announced from the White House, marks the first sustained pause in fighting since March and could reopen aid corridors into Gaza. President Trump is expected to travel to the region this weekend.

Asia Tech and Trade:
China announced it will impose additional port fees on U.S. vessels beginning October 14, mirroring Washington’s own surcharges on Chinese ships. The fees, which could exceed $1 million per voyage for large carriers, underscore escalating maritime trade frictions between the two powers.

Beijing called the U.S. move “discriminatory,” warning that it undermines global supply chains. The U.S. tariffs, part of a broader plan to revive domestic shipbuilding, take effect the same day.

China escalated its tech and trade defenses, blacklisting Canadian chip research firm TechInsights after it revealed foreign components inside Huawei’s newest AI processors.

Beijing’s Commerce Ministry cited “national security” in banning Chinese firms from sharing data with the company, a direct response to Western export controls.

Energy and Commodities:
Russia’s western port oil exports are set to hold near record levels in October at roughly 2.3 million barrels per day, according to industry estimates, even as refinery drone attacks threaten capacity.

Moscow’s OPEC+ quota rose by 93,000 barrels, supporting strong output into year-end.

From Our Partners

10 AI Stocks to Lead the Next Decade

AI is fueling the Fourth Industrial Revolution – and these 10 stocks are front and center. One of them makes $40K accelerator chips with a full-stack platform that all but guarantees wide adoption.

Another leads warehouse automation, with a $23B backlog – including all 47 distribution centers of a top U.S. retailer – plus a JV to lease robots to mid-market operators.

From core infrastructure to automation leaders, these companies and other leaders are all in The 10 Best AI Stocks to Own in 2025.

D.C. in the Driver’s Seat

The government shutdown entered Day 10 with no deal in sight. The Senate remains adjourned until Tuesday, and the House has not scheduled a return.

Talks are now centered on a potential compromise to extend enhanced Affordable Care Act subsidies for two years, capped at $200,000 of household income, a proposal dubbed “two and two” by Sen. Angus King. 

Republicans say any healthcare votes must follow government reopening; Democrats continue to demand simultaneous action.

Separately, a federal judge blocked the Trump administration from deploying National Guard troops in Illinois, citing risks of civil unrest.

The ruling temporarily halts federalized troop movement nationwide for 14 days and marks another legal setback for the White House’s immigration and protest response strategy.

Prediction markets continue to price a 20-day closure, implying an end-of-October resolution. Each week of shutdown typically trims GDP by 0.1–0.2%, though extended closures raise the risk of permanent layoffs and disrupted federal contracting.

Friday Chart Check

Are you a buyer, seller, or staying away?

No deep dive, no overthinking, just a quick pulse check of market sentiment. Cast your vote below to find out what’s behind the chart!

Find out what's behind the chart.

After your vote, click continue to see the full reveal.

Login or Subscribe to participate

Economic Data

Michigan Consumer Sentiment

Fed Speakers: Goolsbee, Musalem

Earnings Reports

No notable reports

Overnight Markets

Asia: Nikkei -1.01%, Shanghai -0.94%
Europe: FTSE -0.10%, DAX -0.16%

U.S. Pre-Market

From Our Partners

Will the “Secret 7” Replace the Magnificent 7?

Marc Chaikin, the Wall Street legend who predicted the 2012 Priceline collapse, the 2020 crash, and the 2022 bear market—says the next wave of AI winners looks nothing like today’s Mag 7.

Chaikin calls them the “Secret 7”—overlooked AI stocks flying under Wall Street’s radar. One has already soared 934% in under two months.

In a new interview, he even reveals the ticker of his #1 free stock recommendation, saying: “If you have $1,000 to invest today, this is where I’d put it.”

Opening Outlook

Markets close the week at a crossroads between optimism and exhaustion. The Gaza cease-fire lifted risk appetite but underscored the fragile interplay between geopolitics, liquidity, and valuation extremes.

AI exuberance remains the market’s dominant theme, and its biggest vulnerability. The same trillion-dollar spending commitments that fuel the rally also amplify systemic risk if funding momentum slows.

Meanwhile, gold at $4,000 and Bitcoin near record highs suggest investors are hedging confidence itself. The paradox of 2025 persists: markets are thriving on the very instability they claim to fear.

Keep Reading

No posts found