Weekend Sum Up and the Week Ahead

Sophia Reyes · October 4, 2025 8:42 PM

The Week That Was

U.S. stocks finished a winning week Friday, buoyed by optimism around artificial intelligence despite the government shutdown delaying the jobs report. The Dow briefly hit 47,000 before closing up 0.5% at a record high, the S&P 500 posted another record, and the Nasdaq fell 0.3%, weighed down by Tesla. All three indexes gained over 1% for the week.

Private data showed a slowing labor market, but investors shrugged off near-term economic worries, instead focusing on AI’s momentum. OpenAI’s valuation surged to $500 billion, and Friday brought new AI deals: Hitachi partnered with OpenAI on energy projects, while Fujitsu expanded ties with Nvidia. Pharma stocks also saw their strongest week in over a decade.

Political uncertainty continues, with Democrats and Republicans at an impasse over funding and subsidies, and President Trump threatening federal employee firings and project cuts. Meanwhile, Netflix tumbled roughly 5% as Elon Musk urged subscription cancellations. Jeff Bezos warned the AI boom may be a “bubble,” even as he acknowledged its transformative potential.

Overall, AI-driven excitement and corporate developments are pushing equities to new highs, highlighting both opportunities and risks in today’s market.

Looking Ahead to Next Week

Tech and momentum stocks have run strongly over recent months, so some consolidation would be normal. Key questions: how deep could a tech pullback go, and how long before dip buyers return? Intermediate-term trends remain bullish, but near-term indicators suggest overbought conditions.

Other Notable Market Moves

• Futures markets now show a roughly 97% chance of another Fed rate cut in October, according to CME FedWatch, helping bolster investor sentiment.
• Chevron (CVX) stock was largely unchanged on Friday after a fire broke out at the company’s El Segundo refinery in Los Angeles County.
• West Texas Intermediate crude oil futures rose 0.6% to $60 a barrel, while Brent crude rose 0.5% to $64 a barrel as traders braced for OPEC+ to push through more supply hikes. Oil prices have fallen roughly 7% this week and are on track for the largest weekly loss since June.
• Gold continued to climb to record highs at $3,906.10 an ounce.
• Monopoly’s impending comeback will boost the fortunes of McDonald’s (MCD), according to Jefferies. “The MONOPOLY game will return to the U.S. for the first time in nearly a decade … which we think will be received positively,” Jefferies analyst Andy Barish wrote in a note to clients.
• DA Davidson analyst Gil Luria reiterated a buy rating on Amazon (AMZN), citing an increasingly upbeat outlook for Amazon AWS cloud sales. Goldman Sachs analyst Eric Sheridan also has a buy rating on Amazon today, as he is also bullish on cloud sales.
• Applied Materials (AMAT) shares fell after the semiconductor giant warned of a $600 million hit to fiscal 2026 revenue. The setback comes as the U.S. expanded its list of restricted exports, impacting industries including semiconductors, aircraft, and medical equipment.
• Tesla (TSLA) stock climbed following a blockbuster report on third-quarter global deliveries. Analysts noted that the expiration of the $7,500 federal tax credit in the U.S. likely boosted sales heading into the quarter.
• Hitachi (6501.T) soared as much as 9%, marking its biggest jump since April 10, after announcing a strategic partnership with OpenAI (OPAI.PVT). The deal is part of a growing trend of collaborations between Japanese technology companies and U.S.-based AI leaders, underscoring the expanding global footprint of artificial intelligence.
• Quantum computing stocks surged this week, with Rigetti Computing and Quantum Computing each climbing more than 27%, D-Wave Quantum up 23%, and Arqit Quantum rallying nearly 37%. IonQ also added about 9%, extending gains after a strong run the prior week.
• Boeing (BA) is facing a potential delay in the launch of its 777X aircraft, with sources indicating commercial service may not begin until 2027, a year later than previously projected. The company declined comment, citing a quiet period ahead of earnings. Shares rose 1% Thursday but dipped early Friday. Fair Isaac (FICO) rallied nearly 18% on Thursday, topping the S&P 500, after announcing a direct-licensing program, and extended its gains into Friday morning.
• Rivian (RIVN) tumbled yesterday despite reporting a 32% jump in third-quarter deliveries that beat analyst expectations. The selloff was driven by weak forward guidance, though shares edged slightly higher this morning.
• Rumble (RUM) climbed after unveiling a partnership with Perplexity, an AI-powered answer engine.
• USA Rare Earth (USAR) surged on reports from CNBC that the company is in close talks with the White House.
• GameStop dropped following a filing in which the company announced it is selling a mix of assets, including common stock and debt, for an undisclosed amount.
• Wells Fargo upgraded Johnson & Johnson to a buy, citing expectations for robust medicine sales over the next two years and the company’s plans to expand its U.S. drug manufacturing operations.

Economic Data

• ADP Employment Change: Declined 32K versus expectations for a 54K increase, which represents the lowest figure since March of 2023.
• JOLTS – Job Openings: Were 7.227M in August, above the 7.20M expected and up from 7.208M in July.
• ISM Manufacturing Index: Came in at 49.1%, slightly above the 49.0% expected. This represents the seventh straight month of contraction (any figure below 50.0 represents contraction, above 50.0 expansion).
• S&P Global U.S. Manufacturing PMI: Pulled back slightly to 52.0 in September from the 3-year high of 53.0 in August.
• S&P Global U.S. Services PMI: Softened to 54.2 from 54.5 in the prior month.
• ISM Services: Declined to 50.0% in September from 52.0% in August. The Prices Index increased 0.2% from August to 69.4%.
• US Challenger Job Cuts: U.S.-based employers announced 54,064 job cuts in September, down from 85,979 in August. September marked the lowest year-to-date hiring plans since 2009. For the third quarter, planned layoffs totaled 202,119, which represents the highest quarterly total since 2020.
• Pending Home Sales: 4.0% vs. 0.5% est.
• Chicago PMI: 40.6 vs. 42.5 est.
• Consumer Confidence: Declined by 3.6 points in September to 94.2, below the 97.0 economists had expected. This represents the lowest reading since April. Consumers’ 12-month inflation expectations eased to 5.8% from 6.1% in the prior month.
• The Atlanta Fed’s GDPNow “nowcast” for Q3 GDP was revised down slightly to +3.8% on October 1st from +3.9% on September 26th.

Economic Headlines

Trump’s Oil Ambitions Fall Short as Prices Drop but Drilling Lags

As President Trump began his second term, he promised in his inauguration speech to “drill, baby, drill,” aiming for a surge in U.S. oil production and lower gas prices. Nine months in, only the latter seems to be happening.

U.S. oil and gas production fell throughout Q3, marking a second consecutive quarter of contraction, according to the Dallas Fed. Oil prices have mirrored the trend: Brent crude is down over 13.5% this year, and West Texas Intermediate (WTI) is down more than 14.5%. The Energy Information Administration expects U.S. oil production to decline about 1% in 2026, while natural gas output remains flat.

High drilling costs, compounded by tariffs on imported piping and equipment, make ramping up production difficult at current prices. A looming supply glut, modest U.S. gasoline demand growth, rising solar power adoption, and falling oil consumption globally further weigh on the sector. Meanwhile, OPEC’s production increases and China’s crude stockpiling add pressure, while U.S. refineries run near peak capacity, creating bottlenecks that depress prices even more.

Trump Administration Restarts Student Loan Forgiveness Under Longstanding IBR Plan

The Education Department has resumed student loan forgiveness this week for borrowers enrolled in the Income-Based Repayment (IBR) plan, which had been paused since July. The program allows borrowers who have spent 20–25 years making payments to have their remaining balances canceled.

While the department did not comment directly, student loan servicers confirmed they were notified of the upcoming discharges. Roughly 2 million people are enrolled in IBR, though not all have met the payment requirements for forgiveness. Borrowers have until October 21 to opt out; after that, eligible loans will generally be cleared within two weeks, though processing times may vary.

The timing is significant: a provision in the 2021 American Rescue Plan shields canceled loans from federal taxes, but it expires December 31. Borrowers forgiven after that date could face tax bills, though this does not affect participants in the Public Service Loan Forgiveness program, which cancels loans after 10 years of qualifying service.

Shutdown Extends to Day Three, but Markets Keep Focus on AI and Fed Cuts

The government shutdown entered its third day on Friday, amplifying worries about macroeconomic headwinds, inflation risks, and signs of a cooling labor market. Still, many investors expect the disruption to be short-lived, limiting its overall impact on the U.S. economy. On Wall Street, sentiment remains firm that the shutdown will not derail momentum in the artificial intelligence trade, especially given that past shutdowns have rarely moved markets in a lasting way.

The lapse in funding has triggered a blackout of key economic data. The Labor Department has suspended nearly all activity, including Friday’s release of the September nonfarm payrolls report. While that removes one potential source of market pressure, it also deprives the Federal Reserve of a critical data point ahead of its October policy meeting. According to the CME FedWatch tool, markets largely expect the Fed to lower rates by a quarter point later this month.

At the same time, political rhetoric has heightened uncertainty around jobs. President Donald Trump warned of large-scale federal layoffs, calling the shutdown an “unprecedented opportunity” to cut government agencies. Treasury Secretary Scott Bessent added that the funding lapse could deliver “a hit to GDP, a hit to growth and a hit to working America.” The Congressional Budget Office estimates that about 750,000 federal workers are being furloughed daily.

These warnings follow disappointing private-sector data. ADP reported that September payrolls saw their sharpest drop since March 2023, underscoring a labor market under strain. Wells Fargo Investment Institute strategist Jennifer Timmerman noted that the weaker data “is soft enough to justify another interest-rate cut by the Federal Reserve at the October 29 FOMC meeting.” She added that the prospect of further easing, coupled with subdued Treasury yields—the 10-year sits at 4.11%—has fueled a stock rally and propelled the S&P 500 to fresh record highs.

Goolsbee Warns Against Rushing Fed Rate Cuts Amid Rising Inflation and Weakening Jobs

Chicago Federal Reserve President Austan Goolsbee cautioned Friday that the central bank shouldn’t rush into cutting interest rates, given rising risks to both inflation and employment. Speaking on CNBC’s Squawk Box, he noted that recent data shows inflation ticking higher while payroll growth weakens, leaving the Fed facing challenges on both sides of its dual mandate. “I’m a little wary about front-loading too many rate cuts and just counting on the inflation going away,” Goolsbee said.

Cryptocurrency Space

Stablecoin inflows surged in Q3, reaching $45.6 billion—up 324% from $10.8 billion in Q2—according to data from RWA.xyz. Tether’s USDT led the gains with $19.4 billion, followed by Circle’s USDC at $12.3 billion and Ethena’s synthetic stablecoin USDe at $9 billion. The rise in inflows comes amid heightened market attention and the recent passage of the GENIUS Act, but tracking future trends will be key. Most stablecoins operate on the Ethereum network, which saw a record 750,000 unique weekly users this summer, marking a new high for Ethereum-based stablecoin adoption, according to The Block.

What to Watch:

Economic Calendar:

• Monday (10/6): no reports
• Tuesday (10/7): Consumer Credit, Trade Balance
• Wednesday (10/8): EIA Crude Oil Inventories, MBA Mortgage Applications Index
• Thursday (10/9): Continuing Claims, EIA Natural Gas Inventories, Initial Claims, Wholesale Inventories
• Friday (10/10): Treasury Budget, University of Michigan Consumer Sentiment

Earnings:

• Monday (10/6): Constellation Brands Inc. (STZ), Aehr Test Systems Inc. (AEHR), Spire Global Inc. (SPIR), Brand Engagement Network Inc. (BNAI)
• Tuesday (10/7): McCormick & company Inc. (MKC), Penguin Solutions Inc. (PENG), Saratoga Investment Corp. (SAR)
• Wednesday (10/8): AZZ Inc. (AZZ), Resources Connection Inc. (RGP), Richardson Electronics Ltd. (RELL), Bassell Furniture Industries Inc. (BSET)
• Thursday (10/9): Applied Digital Corp. (APLD), Apogee Enterprises Inc. (APOG), Delta Air Lines Inc. (DAL), Helen of Troy Ltd. (HELE), Levi Strauss & Co. (LEVI), PepsiCo Inc. (PEP), Neogen Corp. (NEOG), Tilray Brands Inc. (TLRY), VinFast Auto Ltd. (VFS)
• Friday (10/10): no reports