Stocks Climb as Strong AI Spending Boosts Market Confidence

Economic Impact - The ongoing US government shutdown is delaying key economic reports, including unemployment claims and payroll reports, with an estimated 640,000 federal workers expected to be furloughed, potentially raising the unemployment rate to 4.7% [1] - The Philadelphia Fed business outlook survey fell to a 6-month low of -12.8, significantly below expectations of 10.0, indicating negative economic sentiment [2] Market Performance - Precious metals, particularly gold and silver, are experiencing a buying spree due to increased trade tensions and the government shutdown, reaching all-time highs [2] - Stock indexes are rising, supported by strong technology earnings, with optimism surrounding AI spending after Taiwan Semiconductor Manufacturing Co. raised its revenue growth projections for 2025 [4] Earnings Season - The Q3 earnings season is underway, with 78% of S&P 500 companies that have reported so far beating forecasts, and over 22% of companies expecting to exceed analysts' expectations, the highest in a year [6] - Q3 profits are projected to rise by 7.2% year-over-year, the smallest increase in two years, while sales growth is expected to slow to 5.9% year-over-year [6] Interest Rates and Federal Reserve - The market is pricing in a 96% chance of a 25 basis point rate cut at the next FOMC meeting on October 28-29, influenced by dovish comments from Fed officials [7] - The 10-year T-note yield is up to 4.042%, with safe-haven demand fluctuating due to stock market performance and ongoing economic concerns [8][9] Company Movements - Technology stocks, including Amazon, Nvidia, and Alphabet, are seeing gains of over 1%, contributing to broader market support [11] - Gold mining stocks are rising as COMEX gold prices hit record highs, with companies like Kinross Gold and Barrick Mining up more than 2% [12] - JB Hunt Transport Services reported Q3 revenue of $3.05 billion, exceeding consensus estimates, leading to a stock increase of over 16% [13]