The S&P 500 Index ($SPX) (SPY) on Friday closed up +0.01%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.51%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.43%. December E-mini S&P futures (ESZ25) rose +0.01%, and December E-mini Nasdaq futures (NQZ25) fell -0.44%.
Stock indexes settled mixed on Friday, with the S&P 500, Nasdaq 100, and Dow Jones Industrials posting new all-time highs. Stock indexes initially moved higher on Friday as chipmakers and AI-infrastructure stocks gained, driven by optimism that growth in the AI sector will translate into corporate profits. However, higher bond yields on Friday sparked long liquidation in interest rate-sensitive technology stocks. The 10-year T-note yield rose +4 bp to 4.12% on hawkish comments from Chicago Fed President Austan Goolsbee and Dallas Fed President Lorie Logan, who cautioned against additional rate cuts from the Fed.
Stock indexes also fell back from their best levels on Friday to trade mixed after the Sep ISM services index dropped more than expected to a 4-month low. Also, signs of price pressures in the service sector weighed on bond prices and stocks after the Sep ISM services price paid sub-index unexpectedly increased. Finally, the US government shutdown for a third day on Friday dented market sentiment.
The government shutdown means a delay in the release of government reports, including Friday’s monthly payroll report. A prolonged shutdown could also delay the government’s inflation data, scheduled for release on October 15. The White House has warned that if the government shutdown lingered, it would trigger widespread dismissals of employees in government programs that don’t align with President Trump’s priorities. Bloomberg Economics estimates that 640,000 federal workers will be furloughed during a shutdown, which would expand jobless claims and push the unemployment rate up to 4.7%.
The US Sep S&P composite PMI was revised upward by +0.3 to 53.9 from the previously reported 53.6.
The US Sep ISM services index fell -2.0 to a 4-month low of 50.0, weaker than expectations of 51.7. The Sep ISM services price paid sub-index unexpectedly rose +0.2 to 69.4, higher than expectations of a decline to 68.0.
Chicago Fed President Austan Goolsbee cautioned against the Fed front-loading too many interest rate cuts, saying, “The uptick of inflation that we’ve been seeing, coupled with the jobs, payroll numbers deteriorating, has put the Fed in a bit of a sticky spot where you’re getting deterioration of both sides of the mandate at the same time.”
Dallas Fed President Lorie Logan said the Fed “needs to be cautious about further rate cuts from here,” as inflation is further away from the Fed’s target than the maximum employment goal.
Rising corporate earnings expectations are a bullish backdrop for stocks. According to Bloomberg Intelligence, more than 22% of companies in the S&P 500 provided guidance for their Q3 earnings results that are expected to beat analysts’ expectations, the highest in a year. Also, S&P companies are expected to post +6.9% earnings growth in Q3, up from +6.7% as of the end of May.
The markets are pricing in a 98% chance of a -25 bp rate cut at the next FOMC meeting on Oct 28-29.
Overseas stock markets on Friday settled higher. The Euro Stoxx 50 closed up +0.10%. China’s Shanghai Composite did not trade and is closed for the week-long Lunar New Year holiday. Japan’s Nikkei Stock 225 climbed to a 1-week high and closed up +1.85%.
Interest Rates
December 10-year T-notes (ZNZ5) on Friday closed down by -8 ticks. The 10-year T-note yield rose +3.6 bp to 4.119%. Dec T-notes gave up an early advance and turned lower Friday due to hawkish comments from Chicago Fed President Austan Goolsbee and Dallas Fed President Lorie Logan, who cautioned against additional Fed interest rate cuts. T-notes were also pressured after the Sep ISM services price paid sub-index unexpectedly rose, a sign of price pressures in the service sector.
Dec T-notes initially moved higher on Friday and posted a 1-week high, and the 10-year T-note yield fell to a 2-week low of 4.077%. T-notes garnered early support on Friday after the Sep ISM services index fell more than expected to a 4-month low. The ongoing US government shutdown is also bullish for T-notes on concerns that a protracted shutdown could weaken the economy, a supportive factor for T-notes.
European government bond yields moved lower on Friday. The 10-year German bund yield fell to a 2-week low of 2.690% and finished down -0.2 bp at 2.698%. The 10-year UK gilt yield fell -2.0 bp to 4.690%.
Eurozone Sep PPI fell -0.3% m/m and -0.6% y/y, weaker than expectations of -0.1% m/m and -0.4% y/y, with the -0.6% y/y fall the largest year-over-year decline in 9 months.
The UK Sep S&P composite PMI was revised downward by -0.9 to a 5-month low of 50.1 from the previously reported 51.0.
ECB Governing Council member Wunsch stated that ECB policymakers have found the “perfect calibration” for interest rates and policy settings, which are appropriate to ensure that consumer prices rise in line with the 2% target in the medium term.
Swaps are discounting a 1% chance for a -25 bp rate cut by the ECB at its next policy meeting on October 30.
US Stock Movers
Humana (HUM) closed up more than +10% and added to Thursday’s +4% jump to lead managed health care companies higher and gainers in the S&P 500 after it reaffirmed its earnings guidance for 2025. Also, Centene (CNC) closed up more than +5%, and Cigna Group (CI) closed up more than +4%. In addition, Molina Healthcare (MOH) and Elevance Health (ELV) closed up more than +3%, and UnitedHealth Group (UNH) closed up more than +1% to lead gainers in the Dow Jones Industrials.
Fair Isaac Corp (FICO) closed up more than +3%, adding to Thursday’s +17% surge after announcing it will sell credit scores directly to mortgage resellers, reducing their reliance on credit bureaus.
Knight-Swift Transportation Holdings (KNX) closed up more than +3% after Stifel upgraded the stock to buy from hold with a price target of $45.
Zillow Group (ZG) closed up more than +2% after Gordon Haskett upgraded the stock to buy from hold with a price target of $90.
Freeport-McMoRan (FCX) closed up more than +2% after UBS upgraded the stock to buy from neutral with a price target of $48.
Entergy (ETR) closed up more than +1% after Scotiabank upgraded the stock to sector outperform from sector perform with a price target of $105.
Occidental Petroleum (OXY) closed up more than +1% after Mizuho Securities upgraded the stock to outperform from neutral with a price target of $60.
US-listed Macau-linked casino stocks retreated on Friday after Citigroup said national passenger data from China’s travel ministry for the first two days of the Golden Week holiday was weaker than expected. Wynn Resorts Ltd (WYNN) and Las Vegas Sands (LVS) closed down more than -7%. Also, MGM Resorts International (MGM) closed down more than -2%.
Chip makers and AI-infrastructure stocks gave up early gains and turned lower on Friday, which weighed on the Nasdaq 100. KLA Corp (KLAC) closed down more than -3%. Also, Applied Materials (AMAT) closed down more than -2% after saying its net revenue for fiscal year 2026 is set to decrease by $600 million due to a new rule by the US Department of Commerce’s Bureau of Industry and Security. In addition, Advanced Micro Devices (AMD) closed down more than -2%, and Intel (INTC) and Texas Instruments (TXN) closed down more than -1%.
Weakness in most of the Magnificent Seven technology stocks was a drag on the overall market. Meta Platforms (META) closed down more than -2%, and Tesla (TSLA) and Amazon.com (AMZN) closed down more than -1%. Also, Nvidia (NVDA) closed down -0.67%.
Palantir Technologies (PLTR) closed down more than -7% to lead losers in the S&P 500 and Nasdaq 100 after Reuters reported that an Army memo stated the company’s battlefield communications network has serious “fundamental security” flaws.
Hecla Mining (HL) closed down more than -1% after Roth Capital Partners downgraded the stock to sell from neutral with a price target of $8.75.
Earnings Reports(10/6/2025)
Aehr Test Systems (AEHR), Constellation Brands Inc (STZ).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
Right now is a great time to invest in technology stocks — for two reasons. First, we’re at the beginning of the growth story for a promising new area, and that’s artificial intelligence (AI). JPMorgan Chase Chief Executive Officer Jamie Dimon has even said that AI could be as transformational for the world as the steam engine and the internet. And analysts predict that in just the time frame of today through 2030, the AI market could grow from $200 billion to more than $1 trillion.
Second, some of these players are trading at reasonable valuations right now considering their long-term prospects. That offers investors an opportunity to get in on this exciting growth story at a fair price.
So, if you have $50,000 to invest and are looking to buy growth stocks, it’s a great idea to pick up technology players that operate in the AI space, from designers of AI products to those who use them or sell AI services to others. I would spread this investment across several players and of course, make sure that this is in the context of a diversified portfolio; it’s always best to invest across a few sectors in case one falls on hard times.
To increase the safety of this bet, I favor companies that don’t rely uniquely on AI and prior to this boom, already built profitable businesses. Considering all of this, here are the best stocks to invest $50,000 in right now.
Image source: Getty Images.
Amazon
Amazon(NASDAQ: AMZN) may be the safest of all AI bets thanks to its diversification across high-growth industries. The company is a leader in e-commerce and in cloud computing through its Amazon Web Services (AWS) business. These two major areas have helped Amazon generate billions of dollars in revenue and profit in recent years. And today, Amazon’s investment in AI is adding to the gains.
This market giant is benefiting from AI in two ways. First, Amazon uses the technology to increase its own efficiency in e-commerce — for example, selecting the fastest delivery routes for packages. This should lower Amazon’s costs and in turn, boost profit. Second, AWS is going all in on AI, offering a wide range of products and services to fulfill just about every need of a customer launching an AI project. AWS recently reached a $105 billion annual-revenue run rate thanks to this focus on AI.
Today, Amazon shares trade for 39 times forward-earnings estimates. This isn’t dirt cheap but remains very reasonable considering the company’s solid market position.
Oracle
Oracle(NYSE: ORCL) is an up-and-coming AI powerhouse. Originally known for its database software, Oracle has shifted to prioritizing cloud infrastructure in recent times — and it’s been a worthwhile bet because the company has seen demand and revenue take off.
In the most-recent quarter, for example, cloud-infrastructure revenue soared 45% to $2.2 billion, and total remaining-performance obligations (RPO) — representing contract backlog — surged 53% to $99 billion. All of this offers investors a reason to be optimistic about growth ahead.
Another positive point is Oracle has signed multicloud agreements with market giants AWS, Microsoft, and Alphabet‘s Google Cloud. These allow customers to use Oracle’s database technology through any of these cloud providers. So Oracle has made itself easy to access and on top of this, gives customers additional types of flexibility, such as Oracle Alloy, which allows partners to customize their cloud experience.
Oracle shares trade for 26 times forward-earnings estimates right now, higher than in the past but a deal considering Oracle’s AI growth.
Meta Platforms
You may use a Meta Platforms(NASDAQ: META) service daily if you message a friend on WhatsApp or Messenger, or post something to Instagram or Facebook. Meta owns these top social media apps and thanks to advertisers on these platforms, the company has generated billions of dollars in earnings.
I expect this to continue since Meta has a solid moat, or competitive advantage. It’s very difficult for users to switch to other platforms, knowing that many of their contacts may not follow. After all, about 3.2 billion people worldwide use at least one of Meta’s apps daily.
But Meta isn’t stopping there. The company has made AI its biggest investment area this year and already has launched its first virtual assistant. In fact, the company aims to create AI tools for professional and leisure purposes to suit the needs of every Meta user. And that may be just the beginning, as Meta is exploring a wide array of AI products and services with the aim of being a leader in the space.
All of this makes the stock look particularly cheap at only 26 times forward-earnings estimates.
Nvidia
This article wouldn’t be complete without mentioning the star of the AI market right now, and that’s Nvidia(NASDAQ: NVDA). Some investors have worried about investing in this chip designer since earnings and share performance have soared so much in recent years. Profit has climbed in the triple digits into the billions of dollars quarter after quarter, and the stock has advanced more than 400% over the past three years.
So, the worry is Nvidia’s strongest wave of growth may have passed, and rivals may slip ahead. I wouldn’t expect Nvidia to register such earnings or share performance non-stop. But I think the growth opportunity is far from over, and a new wave of growth may be just ahead. It’s important to remember that Nvidia is the market leader, and its focus on innovation should keep it there.
The company now is planning for the launch of new architecture Blackwell, a platform that should supercharge growth and could lead to more share performance down the road.
And that’s why Nvidia’s valuation at 42 times forward-earnings estimates looks fair, and it’s worth picking up this winning stock at these levels.
Should you invest $1,000 in Amazon right now?
Before you buy stock in Amazon, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $752,838!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. TheStock Advisorservice has more than quadrupled the return of S&P 500 since 2002*.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in Amazon and Oracle. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Oracle. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The Nasdaq Composite index has had a great year so far, and we’re only a few months into 2024. Technology stocks, which dominate the index, are roaring higher as investors favor growth and innovation such as artificial intelligence (AI) stocks, chip designers, and cloud computing players. This has pushed the index to a record high, confirming that it’s reached bull territory.
And if history is a guide, the Nasdaq’s winning streak may not be over. Over the past six periods of stock market gains dating back to 1990, the Nasdaq has climbed an average of 64% in the first two years of positive performance. The index advanced about 43% last year and so far has climbed 8% this year — so if it follows historical patterns, the Nasdaq could soar this year. Here are my top AI growth stocks to buy before it does…
Image source: Getty Images.
Amazon
Amazon (NASDAQ: AMZN) shares have advanced 20% so far this year, and this top stock could just be getting started. That’s because Amazon is an ideal AI stock to buy: The company is using the technology to improve its e-commerce operations, and it’s also selling AI products and services to cloud computing services customers through its Amazon Web Services (AWS) unit. So, it’s benefiting from AI in two ways.
For example, Amazon uses AI to help it streamline fulfillment center operations and select the shortest delivery routes. This is key because it could reduce the company’s cost to serve.
And AWS has made addressing every level of AI needs a priority, so it offers customers the basics like chips for their training and inference programs as well as a fully managed service that allows them to customize top large language models (LLMs) for their own use. Considering AWS is the world’s leading cloud services player, it already has an enormous audience present — and ready to launch AI projects.
So, it’s clear AI could have a significant impact on Amazon’s earnings growth over time through streamlining e-commerce processes and reducing costs there, and by boosting AWS revenue.
Today, Amazon shares trade for 43 times forward earnings estimates, which looks like a reasonable price for a growth stock — especially one with a solid profitability picture and a compelling AI strategy.
Intel
Intel(NASDAQ: INTC) has struggled to keep up in the AI race, but the tide recently may have turned. The chip company late last year introduced a portfolio of AI products that could up its game and drive a new era of growth. An example is the Intel Core Ultra mobile processor family, a key step to kick off the age of the AI personal computer — these are high-power computers that can carry out many AI tasks.
Intel also announced its latest Intel Xeon processor family with AI acceleration and its Gaudi 3 AI accelerator. I wouldn’t expect these innovations to threaten chip market giant Nvidia‘s leadership, but that’s OK. Considering the opportunity — with the AI market forecast to top $1 trillion by the end of the decade — there’s room for more than one company to carve out market share and benefit. Intel could be one of them thanks to its new and upcoming innovations.
On top of this, Intel’s move to open its manufacturing network up to others, with the goal to become the world’s second-biggest foundry by 2030, could supercharge growth. It’s a big bet, but one that could bring major rewards down the road. Intel already has won commitments from four customers for its 18A process and signed five advanced packaging deals.
Intel shares trade for 29 times forward earnings estimates, a bargain considering the company’s AI and foundry prospects as well as analyst estimates for double-digit annual growth over the next five years. So Intel could be ripe for a rebound, making now an ideal time to get in on this technology giant.
Should you invest $1,000 in Amazon right now?
Before you buy stock in Amazon, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
(Bloomberg) — The interest rate that neither spurs nor slows the US economy has at least doubled in the aftermath of the pandemic, handing investors a reason to be nervous about buying bonds or stocks, according to the latest Bloomberg Markets Live Pulse survey.
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Some 85% of 528 respondents reckon the so-called real neutral rate — which strips out the effect of inflation — has risen to around 100 basis points or higher, from estimates of about 50 basis points before Covid struck.
Federal Reserve Chair Jerome Powell said in March that “honestly, we don’t know” where the neutral rate lies. But if the resilient US economy has pushed it above what has prevailed historically, that adds to the case for the central bank to keep monetary policy tighter for longer — crimping the value of stocks and bonds.
Both asset classes have been getting battered of late as investors have absorbed the prospect of an extended period of higher interest rates. Ten-year Treasury yields briefly eclipsed 5% last week for the first time since 2007, fueling concern over technology-stock valuations in particular. Meanwhile, both the S&P 500 Index and the tech-heavy Nasdaq 100 entered a correction.
For 10-year Treasuries, survey participants have little expectation the pressure will ease. The maturity will likely end the year yielding 5%, according to the median forecast of respondents. More than 60% of poll participants say that both the S&P 500 and the Nasdaq 100 are overvalued, while some 15% estimate that valuations are stretched only for technology stocks.
The Nasdaq 100 will decline by as much as 10% this quarter, according to 45% of respondents. A fifth say it will slump more than that. Earlier in the year, enthusiasm surrounding artificial intelligence spurred investors to overlook rising interest rates, propelling the Nasdaq 100 about 35% higher in the first three quarters of the year. It’s now on track for its third straight monthly decline, something it hasn’t done in more than a year. And by one calculation, the technology complex is still overvalued by 10% as of the close on Friday.
The poll’s findings gel with a report from Bloomberg Economics that concluded the real neutral rate will climb to as much as 2.7% in the 2030s. In turn, according to the study, 10-year Treasury yields could settle somewhere between 4.5% and 5%.
As they did in December 2019, Fed officials estimate a long-run funds rate of 2.5% while assuming inflation of 2%, implicitly projecting a neutral real rate of 50 basis points. The neutral rate may have risen because of a host of factors, on top of the economy’s strength: Baby boomers are retiring and spending down their nest eggs, diminishing the supply of savings; China’s appetite for Treasuries is waning; and widening government deficits are increasing competition for investment capital.
What’s more, uncertainty about the future in the wake of the pandemic has spurred consumers to spend now and save later — a phenomenon known as high time preference. Essentially, that means consumers will seek higher interest rates to invest and forgo current spending, pushing the neutral rate higher.
A narrow majority of survey respondents are pessimistic about the implications of higher Treasury yields. This group projects that if yields stay above 5% for a quarter or longer, they would cause a hard landing, a scenario where the Fed’s actions to tame inflation trigger a recession. Some 47% say the economy would take it in stride.
The topic of elevated yields is likely to come up during Powell’s press conference after the central bank’s Nov. 1 policy decision, when officials are widely expected to hold rates steady at the highest in more than two decades. Investors will watch to see whether Powell comments on the Fed’s comfort level with the recent surge in yields and what that implies for the prospect of a soft landing.
Against the backdrop of elevated Treasury yields and the Fed’s message of higher for longer, almost 60% of survey respondents said they anticipate the dollar will be a stronger a month from now.
The MLIV Pulse survey of Bloomberg News readers on the terminal and online is conducted weekly by Bloomberg’s Markets Live team, which also runs the MLIV blog. Ven Ram is a cross-asset strategist for Bloomberg’s Markets Live. The observations are his own and not intended as investment advice. To subscribe for more MLIV Pulse surveys, click here.
