The major U.S. stock benchmarks closed higher Friday, as optimism over U.S.–China trade talks helped offset the sharp sell-off in regional bank shares earlier in the week.
The Dow Jones Industrial Average climbed 238.37 points, or 0.52%, to finish at 46,190.61. The S&P 500 rose 0.53% to 6,664.01, while the Nasdaq Composite gained 0.52% to end at 22,679.98.
Markets picked up momentum late in the session after Treasury Secretary Scott Bessent signaled he would hold talks with his Chinese counterpart later that day. President Trump also reassured reporters at the White House that his planned meeting with Chinese President Xi Jinping would still take place at the end of the month, easing fears over the potential introduction of a 100% tariff on Chinese goods starting Nov. 1.
Despite some midweek turbulence, all three major averages ended the week with solid gains. The S&P 500 advanced 1.7% for the week, helped by stronger-than-expected early Q3 earnings results. The Dow climbed 1.6%, while the Nasdaq led with a 2.1% gain.
CPI and earnings take the spotlight
With official U.S. data releases delayed by the ongoing government shutdown, corporate earnings and management commentary will provide key insight into the state of the economy.
“Reports and what companies say is really our best chance at assessing what the broader economic health is,” said Kevin Gordon, senior investment strategist at Charles Schwab, according to Reuters.
The U.S. Bureau of Labor Statistics confirmed the delayed consumer price index (CPI) for September will be released on Friday. The inflation print, a critical gauge for policymakers, lands just days before the Federal Reserve System’s next policy meeting on October 28–29. Markets currently anticipate another 25-basis-point rate cut, following the Fed’s first cut of the year in response to soft labor data.
Tesla, Netflix among key earnings this week
About 14% of S&P 500 companies are scheduled to report results in the coming days. Beyond profit numbers, investors will closely watch how firms plan to allocate cash amid an uncertain macro backdrop.
Goldman Sachs expects S&P 500 cash spending to rise 11% in 2026 to around $4 trillion, supported by “above-consensus AI capex growth” and a stronger economy. Roughly half is projected to go toward capital expenditures and R&D, 43% to dividends and buybacks, and the remainder to M&A.
“The AI hyperscalers now account for 27% of S&P 500 capex, and we expect their capex spending will exceed the consensus forecast of 20% growth next year,” Goldman strategists led by David Kostin said. “These companies have recently been growing capex at a run rate of 75% and they continue to message that supply cannot keep pace with AI demand,” they added.
The so-called Magnificent 7 are expected to post 15% earnings growth in Q3, while the other 493 S&P companies are tracking 4%. Last quarter, the Mag-7 delivered a 27% surge, nearly double initial forecasts. “We could see something similar again,” strategists at JPMorgan Chase & Co. led by Mislav Matejka said.
Earnings to watch this week include Tesla, Inc. (NASDAQ:TSLA), Netflix, Inc. (NASDAQ:NFLX), The Coca-Cola Company (NYSE:KO), General Electric Aerospace (NYSE:GE), General Motors (NYSE:GM), IBM (NYSE:IBM), Ford Motor Company (NYSE:F), and Intel Corporation (NASDAQ:INTC), among others.
What analysts are saying about U.S. stocks
Morgan Stanley: “Our rolling recovery/early cycle thesis remains intact over the next 6-12 months. That said, we think it’s important to see clearer trade de-escalation from both sides, stability in EPS revisions, and more ample liquidity before declaring the all-clear on the risk of a further near-term correction.”
Evercore ISI: “Volatility in October 2025 will ultimately prove to be an acceleration of the AI Bull market – through earnings strength, an easing Fed, OBBB stimulus and revived capital markets cycle – not the end.”
RBC Capital Markets: “The deterioration in earnings sentiment, which surged from typical non-crisis lows in late April to typical non-crisis recovery peaks in mid-August has been one thing that has kept us on guard for a tier 1 / 5-10% pullback in US equities this fall, along with stretched valuations, weak seasonals, choppy bitcoin trends, weaker US equity flows, recent declines in our sentiment indicator, and jittery investors in our meetings that we’ve worried would be inclined to take profits soon.”
Goldman Sachs: “The backdrop of healthy earnings growth, loose financial conditions, and falling policy uncertainty should support strong cash spending growth next year. The recent outperformance of companies with weak balance sheets is one reflection of the equity market moving to price this friendly backdrop.”
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