Major stock indexes experienced a notable decline at the close of the week after showing promise earlier in the trading sessions. The S&P 500 and Nasdaq had initially been on track for potential weekly gains, but ultimately joined the Dow Jones Industrial Average in concluding the week on a down note after all three indexes fell sharply on Friday.
For the week, the Dow Jones posted a loss of 2.7%, the S&P 500 decreased by 2.4%, and the Nasdaq saw a decline of 2.5%. This marks the second instance in just three weeks that all three indexes have ended on a negative note over a five-day trading period. Despite this downturn, the Nasdaq still boasts the highest year-to-date return among the major indexes, up more than 15%. Meanwhile, the S&P 500 has seen an increase of nearly 12%, and the Dow Jones is up by over 7% for the year.
In the realm of prediction markets, Kalshi has made headlines by more than doubling its valuation to $5 billion within the span of just three months. In August, the firm secured $300 million in a funding round led by prominent investors, including Sequoia Capital and Andreessen Horowitz. This surge in valuation reflects the rapid growth of the prediction market sector, further fueled by Kalshi’s expansion into over 140 countries and a significant rise in trading volume, which surpassed $1 billion in early October.
Despite a looming government shutdown, consumer sentiment remained relatively stable, as indicated by the Michigan Consumer Sentiment Index, which recorded a slight decrease to 55.0 in early October. This index was anticipated to take a sharper dip, yet consumer outlooks show little change compared to the previous month. However, concerns regarding job stability persist in the backdrop of political uncertainty.
In international trade news, tensions between the U.S. and China escalated as President Trump threatened to impose a “massive increase” in tariffs on Chinese imports, following China’s restrictions on the export of rare earth minerals crucial to high-tech manufacturing. This renewed threat raises concerns about the stability of trade discussions between both nations, as they had reached a temporary truce earlier in the year.
Levi Strauss shares experienced a significant drop despite reporting substantial earnings growth, primarily due to a pessimistic outlook for the current quarter influenced by new tariff policies. The company foresees a reduction in gross margins alongside adjusted earnings that fell short of Wall Street expectations, affecting investor confidence.
Nvidia shares hovered near all-time highs, underpinned by strong demand driven by the artificial intelligence sector. The company’s soaring stock performance reflects optimism about AI’s long-term growth potential, bolstered by recent positive developments from its suppliers.
In contrast, Qualcomm’s stock faced turmoil following the announcement of an antitrust investigation by Chinese regulators, centered on their acquisition of Autotalks. This scrutiny is perceived as part of broader trade tensions as discussions between the U.S. and China intensify.
On a positive note, Applied Digital saw its shares soar by 20% following strong earnings that exceeded analyst expectations, significantly benefiting from rising demand in the AI sector. Additionally, the firm’s recent lease agreement with CoreWeave positions it favorably in a rapidly growing market.
As the week progressed, Polymarket data indicated a low likelihood of an immediate resolution to the government shutdown, with a mere 6% chance of a funding bill being passed by mid-October, although sentiment improved notably by the end of the month.
Finally, Stellantis shares rose by 1% after the automaker’s preliminary figures indicated a significant increase in third-quarter shipments, buoyed by improved inventory conditions, although the company has still faced a challenging year overall. Futures for major indexes showed minor gains as the week drew to a close, reflecting some optimism in the market.
