Has the relief rally already begun?… The Federal Reserve just blinked (again)… Some ‘messy’ action could be ahead… Earnings season starts… Reports from the big banks… The Magnificent Seven versus the rest…

This trading day was all over the map…

The market started off gloomy.

Headlines were still all about the trade war. This included comments from U.S. Treasury Secretary Scott Bessent to the Financial Times that China wants to “pull everyone else down with them.”

Against this backdrop, the major U.S. stock indexes opened lower today. The benchmark S&P 500 was down by as much as 1.5%.

But after the first 15 minutes of trading, stocks began to reclaim their early losses…

And a few hours later, the indexes turned positive. Federal Reserve Chair Jerome Powell outlined in a speech that the central bank should soon stop reducing its balance sheet. (Tinkering with its balance sheet – buying or selling U.S. Treasurys, mainly – is the Fed’s other big monetary policy “tool” other than tweaking bank-lending rates.)

This move could happen “in the coming months,” Powell said. This would mark a shift from a multiyear run of “quantitative tightening” – reducing its bond holdings by about $2.2 trillion – that the bank has done since early 2022 after inflation took off to a 40-year high.

But then, late in the trading day, President Donald Trump criticized China on social media once again (for not buying soybeans and calling that an “economically hostile act”). This pushed the S&P 500 slightly into the red to close this up-and-down day.

The Dow Jones Industrial Average finished up 0.4%, and the small-cap Russell 2000 Index led, gaining 1.3%. The Nasdaq Composite Index lagged and finished down 0.6%.

The makings of a ‘relief rally’…

Before the late volatility, as DailyWealth Trader editor Chris Igou wrote to subscribers, it looked like “a relief rally has already started” for stocks in general… after Trump’s tariff threats sparked Friday’s sell-off, which we detailed yesterday.

And as Chris explained to his subscribers, the current setup presents a favorable outlook for one “trading for income” position in his model portfolio. He says this stock has fallen too far, too fast to technical “oversold” levels.

Out of fairness to Chris’ paying subscribers, I (Corey McLaughlin) can’t name the stock here… But it’s a household name, and Chris shared indicators suggesting generous returns ahead.

DailyWealth Trader subscribers and Stansberry Alliance members can get the details here.

More broadly, we’ll watch for signs that a possible “relief rally” – if investors think the worst of the U.S.-China trade spat is behind us once again – could have legs. If so, yesterday might have marked a short-term bottom.

The short-term path ahead could be ‘messy’…

Even if stocks are due to move higher again, it likely won’t be a straight shot up in the weeks ahead. That was the update from Ten Stock Trader editor Greg Diamond to his subscribers this morning. As Greg shared…

China came out with sanctions on U.S. shipping, and markets are moving on the news.

When we look at the S&P 500 Index, we can see yesterday (October 13) may have marked a lower high…

Will the U.S. raise the stakes or will this latest move simply set the stage for trade negotiations into the first week of November?

Remember that earnings season kicks off today as well.

This could make for some messy price action. That’s why I’m OK to sit on the sidelines for a bit to see how things shake out.

Greg also mentioned the next Fed meeting at the end of October as another possible catalyst that could make for a “messy few weeks” for U.S. stocks. So he’s not recommending aggressive trades to subscribers in either direction right now.

Speaking of earnings season…

About 10% of the S&P 500 will release quarterly financial results this week. That started today with America’s big banks…

This morning, JPMorgan Chase (JPM) beat Wall Street’s estimates for both revenue and earnings per share (“EPS”), with the latter up 12% year over year. JPMorgan’s investment-banking revenue set a record for the third quarter, while Chase debit- and credit-card spending was up 9% year over year.

Elsewhere in the banking sector, Goldman Sachs (GS) also benefited from an ongoing boom in trading, with investment banking revenue jumping 42% in the quarter. And Citigroup (C) reported record revenue across all three of its segments.

So, on the surface, the banking sector has made for a strong start to earnings season. The market agreed…

The Financial Select Sector SPDR Fund (XLF) rose roughly 1.5% today, and financials outperformed most other major S&P 500 sectors.

Where the concerns are…

In a prepared statement with his company’s report, JPMorgan CEO Jamie Dimon said that the U.S. economy has “generally remained resilient” in the face of challenges like a slower labor market. But he doesn’t believe we’re in the clear just yet. He said…

There continues to be a heightened degree of uncertainty stemming from complex geopolitical conditions, tariffs and trade uncertainty, elevated asset prices and the risk of sticky inflation.

One metric shows that JPMorgan is preparing for some pain in its consumer division. Provisions for credit losses – money JPMorgan sets aside for loans it doesn’t believe will be paid back – rose to $3.4 billion in the third quarter.

That’s the highest level since the second quarter of 2020 – when they peaked at $10.5 billion. We’re still a long way from that number today. And JPMorgan is being more conservative than the other banks.

Both Citi and Wells Fargo (WFC), which also released quarterly results today, reported declines in provisions for credit losses.

But it’s notable that one of the world’s largest banks is seeing exactly what we’re seeing – consumer debt is becoming a troubling piece of the economy. As we wrote last week…

In August, the average credit-card interest rate came in at 21.4%. That’s down slightly from the high of 21.8% we saw in August 2024, but it’s well above the 14.6% we saw in 2021.

And with credit-card delinquencies at their highest level since 2011, folks are both falling behind and having to pay more in interest on their late payments.

Meanwhile, on an earnings call with analysts today, Citi’s Chief Financial Officer Mark Mason fielded a question about AI. He replied that there is “some frothiness in different sectors” of the stock market…

I feel good about our business and our ability to cover clients. But it’s hard to look at how equity valuations and multiples sit today and not think there are some sectors that are likely frothy and overvalued. But we’ll see how those play out over time.

Looking ahead to the rest of the reports…

We’ll parse through tons of information in other companies’ earnings releases over the coming weeks. From tariff impacts to reads about the health of consumers to AI trends, we’ll have a lot of themes to discuss.

Overall, Wall Street analysts expect the S&P 500’s EPS to grow by 8% in the third quarter. Some other predictions, like from FactSet, are even more optimistic – estimating that the S&P 500’s EPS will rise by 13% for the third quarter.

Either way, the Magnificent Seven will likely be the largest contributors to that growth…

In the first two quarters of 2025, the S&P 500 grew EPS by 13% and 12%, respectively. That growth was dominated by the Mag Seven names – which grew their EPS by an average of 27.7% and 26.6% in those two quarters, respectively.

The other 493 companies “only” grew their earnings by 9.4% in the first quarter and 8.1% in the second quarter – both below the broader index’s growth rate.

And that’s likely to continue for the next few quarters. Just take a look at this chart from FactSet…

The first Mag Seven earnings will start rolling in next week. And we’ll be watching.

As we’ve written before, as the market-cap-weighted S&P 500 has become more concentrated in a handful of AI winners, the more important these earnings reports get – for better or worse.

And as our colleague Mike Barrett told his Select Value Opportunitiessubscribers in an October 1 weekly update…

With third-quarter earnings about to begin rolling out, we expect investors will punish any company that doesn’t meet their lofty expectations.

That’s especially true when it comes to the high hopes surrounding the Mag Seven stocks.

Lastly today, don’t miss this ‘Super AI’ debut…

Over the weekend, we shared a pair of Masters Series essays (here and here) by TradeSmith CEO Keith Kaplan. As you may have read, Keith and his team at our corporate affiliate are set to unveil a “Super AI” stock-trading system that has shown some impressive promise.

As Keith shared in Saturday’s Digest, this is an AI-powered trading system. It’s trained on more than 100 billion stock market data points to project where thousands of stock prices are likely to move next, with 85% back-tested accuracy. From Keith…

In back tests, it delivered an average annual return of 374% over five years – through the pandemic, the 2022 crash, the ongoing trade war, two wars, and wild swings in interest rates.

And as he explained on Sunday about this hedge-fund-level system that he and dozens of researchers at TradeSmith have developed…

It’s a genuine game changer, and I want as many people as possible to see it in action.

AI is already helping experts predict hurricanes, diagnose tumors, pilot fighter jets, and discover new medicines. Investors who use it to sharpen their edge will have a huge advantage over everyone else. Investors who don’t take advantage risk getting left behind.

By now, you’re probably familiar with ChatGPT, Gemini, and Copilot. These are called large language models because they’re trained on massive datasets of words.

Think of our AI-powered trading system as a large numbers model.

Instead of words, it’s trained on sequences of historical values, including their irregularities, jumps, and volatility spikes.

The butterfly effects, in other words.

It looks at past data to guess when patterns are likely to happen again. It can spot a familiar trend in new numbers. And it keeps updating its guesses as fresh data comes in.

Keith is also pointing to October 22 as the date of a potential trigger for one of the biggest market moves in a decade. That’s why he’s going on camera to detail exactly how his powerful new breakthrough can help you capitalize on this looming shift.

You can hear all the details starting tomorrow at 10 a.m. Eastern time. Register here now to make sure you don’t miss anything.

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Recommended Links:

‘Biggest Breakthrough in the History of Stock Trading’ Goes Live Tomorrow at 10 a.m. Eastern Time A Maryland computer whiz recently created a new form of “Super AI” that can foresee the future prices of any of 2,334 stocks – to the day and even the penny – with 85% back-tested accuracy. It has led to a huge anomaly that turned every $100,000 into $702,190 in the last year alone in one study. Until tomorrow, claim free access here (no purchase required). Must See: America’s $1 TRILLION GOLD Stash Gold has hit all-time highs, breaking $4,000 an ounce – but history shows it could be on the verge of its biggest bull run in more than half a century… triggered by a likely major event, eerily similar to what happened in the 1970s. (It’s NOT inflation or anything you’re likely expecting.) And Stansberry Research Senior Partner Dr. David Eifrig believes you MUST own shares of his No. 1 gold stock. He says it’s likely better than any miner, explorer, or exchange-traded fund on Earth. It’s the centerpiece of his full plan for this brutal market, with extraordinary upside potential. Click here for full details on this developing gold story.

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New 52-week highs (as of 10/13/25): Agnico Eagle Mines (AEM), BWX Technologies (BWXT), Cameco (CCJ), Ciena (CIEN), Equinox Gold (EQX), Comfort Systems USA (FIX), VanEck Gold Miners Fund (GDX), VanEck Junior Gold Miners Fund (GDXJ), SPDR Gold Shares (GLD), iShares Convertible Bond Fund (ICVT), Kinross Gold (KGC), Lynas Rare Earths (LYSDY), Ormat Technologies (ORA), Pan American Silver (PAAS), abrdn Physical Palladium Shares Fund (PALL), Invesco WilderHill Clean Energy Fund (PBW), Sprott Physical Gold Trust (PHYS), Sprott Physical Silver Trust (PSLV), Seabridge Gold (SA), Skeena Resources (SKE), iShares Silver Trust (SLV), Torex Gold Resources (TORXF), Uranium Energy (UEC), ProShares Ultra Gold (UGL), Global X Uranium Fund (URA), and Utilities Select Sector SPDR Fund (XLU).

In today’s mail, feedback on yesterday’s edition… and we answer a question stemming from Stansberry Research senior analyst Brett Eversole’s bullish outlook on gold… Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

“Investors who panic sell on a [Trump] tweet remind me of birds in the yard who scatter and fly off whenever they hear a loud sound.” – Subscriber Darren N.

“Where would I find Brett’s Ultimate Gold portfolio?” – Subscriber Robert S.

Corey McLaughlin comment: You can find it in True Wealth Systems. The original recommendations can be found here, and you can find the updated buy advice in Brett’s latest portfolio update for True Wealth Systems here.

All the best,

Corey McLaughlin and Nick Koziol
Baltimore, Maryland
October 14, 2025