Stocks Climb on Strong Q3 Earnings and Easing Trade Concerns

Economic Indicators - US MBA mortgage applications fell by -1.8% in the week ended October 10, with the purchase mortgage sub-index down -2.7% and the refinancing mortgage sub-index down -1.0% [1] - The average 30-year fixed rate mortgage decreased by -1 basis point to 6.42% from 6.43% in the prior week [1] - The October Empire manufacturing survey general business conditions index rose by +19.4 to 10.7, exceeding expectations of -1.8 [1] Trade and Market Reactions - The escalation of trade tensions between the US and China has led to increased demand for precious metals, with gold reaching a new all-time high [2] - Global bond markets have seen a decline in yields, with the 10-year German bund yield dropping to a 3.25-month low of 2.57% and the 10-year T-note yield falling to a 3.5-week low of 4.00% [2] - Stocks are rising following dovish comments from the Fed, with expectations for a rate cut at the next FOMC meeting on October 28-29 [3][8] Corporate Earnings - Better-than-expected quarterly earnings results have sparked a risk-on sentiment in equity markets, with notable gains in technology stocks, particularly chipmakers [5] - ASML Holding saw an increase of more than +3% after reporting stronger-than-expected Q3 new orders [5] - Morgan Stanley and Bank of America reported solid Q3 earnings, with Morgan Stanley's FICC sales and trading revenue at $2.17 billion, above the consensus of $2.07 billion, and Bank of America's net interest income at $15.23 billion, exceeding the consensus of $15.03 billion [16][17] Market Performance - The S&P 500 Index rose by +1.01%, the Dow Jones by +0.64%, and the Nasdaq 100 by +1.40% [6] - The markets are pricing in a 98% chance of a -25 basis point rate cut at the next FOMC meeting [8] - European government bond yields are also declining, with the 10-year German bund yield down to a 3.25-month low [12] Sector Movements - Chipmakers and AI infrastructure stocks are experiencing significant gains, with Advanced Micro Devices up more than +7% [15] - Bunge Global SA is leading gains in the S&P 500 with an increase of more than +13% after projecting full-year adjusted EPS of $7.30 to $7.60 [16] - Dollar Tree is up more than +1% after projecting earnings per share to gain as much as 10% annually over the next three years [18]