Trade Secrets

WTF Dailies October 07, 2025

US stock futures fluttered above the flatline late Monday after Wall Street's latest record-setting run, bolstered by more artificial intelligence hopes.

Sage Kakkat

06 Oct 2025 — 7 min read

US stock futures fluttered above the flatline late Monday after Wall Street's latest record-setting run, bolstered by more artificial intelligence hopes.
The recent run has strategists once again lifting their targets for the S&P 500 though much rests on the upcoming earnings season from Big Tech names.
Those earnings will take on even greater prominence in the weeks ahead if the US government remains shuttered, suspending the release of key economic data. The shutdown has already postponed the release of September's jobs report, and next week's consumer and producer inflation reports could be next to see a delay.
Asian stocks advanced on Tuesday as technology stocks tracked gains in their U.S. peers on persistent optimism over artificial intelligence.
Japanese markets continued to outperform, hitting fresh record highs after rallying as the election of a fiscally dovish prime ministerial candidate dampened bets on more interest rate hikes by the Bank of Japan.
But Asian trading volumes were muted on account of market holidays in China, Hong Kong, and South Korea.
Regional markets took positive cues from Wall Street, which clocked record highs on Monday amid strength in technology shares, especially chipmakers.
But S&P 500 Futures fell 0.1% in Asian trade, indicating that a Wall Street rally may be cooling amid persistent concerns over an ongoing U.S. government shutdown. Several Federal Reserve officials, most notably Chair Jerome Powell, are set to speak this week.
Globally, risk appetite was also dented by an ongoing political crisis in France.
The Nikkei 225 index rose as much as 1% to a record high of 48,544.0 points, while the TOPIX hit a peak of 3,248.39 points. Both indexes traded below their highs by 22:12 ET (02:12 GMT).
Industrials continued to lead the index higher, while chipmakers also rose tracking gains in their U.S. peers.
Japanese stocks rallied on Monday after conservative politician Sanae Takaichi was elected as the leader of the ruling Liberal Democratic Party over the weekend, setting her up to become Japan’s first female prime minister. A parliamentary session on the matter is set to take place in mid-October.
Takaichi is widely viewed as a fiscal dove, and is expected to dole out more expansionary fiscal policies. She has also largely opposed the BOJ’s raising of interest rates, and has called for more accommodative policies to support a sluggish economy.
The prospect of more government support boosted Japanese stocks, with industrials benefiting from bets that Takaichi’s government will ramp up spending on manufacturing and defense industries.
But questions over just how Takaichi will fund additional fiscal spending remained, weighing on the Japanese yen and government bonds.
Asian tech stocks were the best performers for the day, tracking overnight gains in their U.S. peers. Chipmakers advanced tracking a nearly 24% spike in AMD (NASDAQ:AMD), after the company won a deal to supply AI chips to OpenAI.
The deal spruced up hopes that AI demand will continue to support the tech and chip industry. Among individual movers, Taiwan’s TSMC (TW:2330) rose 2.5% and was close to a record high.
Among broader Asian markets, Singapore’s STI index surged 0.9%, while Australia’s ASX 200 fell 0.3%.
Australian metals miner South32 Ltd (ASX:S32) outpaced local stocks, rising over 4% after it agreed to sell about $17.8 million worth of shares in Trilogy Metals Inc (TSX:TMQ) to the U.S. Department of War.
Elsewhere, India’s Nifty 50 index rose 0.4% in morning trade after rising past 25,000 points in recent sessions. Focus is now squarely on the upcoming third-quarter earnings season, which is set to begin in earnest this week.

Market Close

Equity markets finished lower on Tuesday as the government shutdown entered its seventh day. Sector performance was mixed, with consumer staples and utility stocks leading gains, while the consumer discretionary and communication sectors lagged, likely reflecting a risk-off tone to the trading session. Small- and mid-cap stocks also trailed large-cap stocks.
In international markets, Asia finished mixed overnight, as Japan's Nikkei 225 index hit another record closing high. European markets were down following yesterday's unexpected resignation of France's prime minister Sebastien Lecornu, adding political uncertainty and potentially weighing on investor sentiment.
The U.S. dollar strengthened against major international currencies.
In commodity markets, WTI oil traded higher as OPEC+ output hikes were smaller than expected.
Bond yields fell, with the 10-year Treasury yield at 4.13%, still above September's low of 4.0%. Bond markets are reflecting expectations for the Fed to continue its easing cycle it resumed last month to support the cooling labor market. Futures markets are pricing in one or two more interest-rate cuts this year, followed by another one or two cuts next year, which would bring the fed funds rate down to the 3.0% - 3.25% range. The Fed's own projection suggests one less rate cut over this time frame. Several Fed officials are scheduled to deliver speeches this week, which should provide insight into their views on the labor market and inflation as we approach the next Fed meeting on October 30. In our view, given the potential for economic momentum to slow, driven in part by the ongoing government shutdown, the Fed likely remains on track for one or two more rate cuts this year. We expect lower interest rates to reduce borrowing costs for consumers and businesses, which should help provide stimulus to the economy.
Expect a short-term slowdown in growth during the shutdown, followed by a period of recovery once funding resumes. Because furloughed federal workers are generally guaranteed backpay, the shutdown tends to delay rather than eliminate spending and economic activity. That said, there is the potential for permanent layoffs this time, although it remains to be seen if and to what extent these are implemented.
Businesses dependent on government contracts may also experience permanent income loss. Historical precedent suggests a potential drag of 0.1%–0.2% on quarterly GDP growth for each week of closure. The longer the shutdown lasts, the more noticeable the economic impact, and the greater the political cost for both parties and pressure to reach an agreement.
While growth may slow in the fourth quarter, it does so from a strong starting point, with activity likely rebounding in the first quarter, assuming the shutdown lasts weeks rather than months.

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