Markets spent the week shaking off October’s nerves and leaning into optimism. The cooler CPI print midweek was the turning point… enough to calm inflation anxiety without reigniting growth fears. The S&P 500 and Nasdaq reached fresh all-time highs after solid weekly gains, led by tech, cyclicals, and small caps, while long yields stuck to 4.0% as traders priced in a gentler policy path. The Dow briefly broke new highs, showing risk appetite is still intact (at least for now.)
Still, much of the move looked more like positioning than conviction. The rally feels as a relief trade atop fragile plumbing — liquidity remains uneven, credit is quietly tightening, and capital is clustering into fewer winners. Energy faded after its sanctions surge, gold eased, and volatility stayed contained as a sign that markets are comfortable… maybe a little too comfortable, with the “soft-landing forever” story.
Behind the calm, traders were watching the same fault lines: a credit system stretched thin, global trade adapting to shifting sanctions, plus lack of official data, and the slow boil of consequences from a derelict government. The week ended strong, but confidence felt conditional, more reprieve than resolution.
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Next week will test how durable that optimism really is. The calendar packs a one-two punch: FOMC (Oct 28–29) and PCE/GDP (Oct 31)… the first will shape tone, the second will test data. The mood heading into the weekend points to a market balanced on expectation rather than evidence: the disinflation trend is clear, but growth is still a question mark, and the Fed isn’t ready to declare victory.
Global indicators will add texture: China PMIs, Eurozone inflation, and durable goods will show whether the global cycle is bottoming or just stalling. Meanwhile, political theater looms large with a potential Trump–Xi meeting at APEC, introducing headline risk to energy, semis, and defense.
The stance into Monday: constructive but cautious. The week ahead favors traders who can fade emotional moves and follow the plumbing — liquidity, spreads, and flows — instead of headlines. As we put it earlier this week, “the tape is calm because everyone’s watching the same storm.” Next week, we find out which way the wind actually blows.