Wall Street update: Record highs for US stock markets

US indices rally amid cooler inflation

United States (US) stock markets closed at fresh record highs on Friday as a cooler-than-expected inflation report reinforced expectations of multiple Federal Reserve (Fed) rate cuts before the year end. For the week, the Dow Jones soared 1016 points (2.20%), the Nasdaq 100 added 2.18% and the S&P 500 gained 1.92%.

Friday’s consumer price index (CPI) release showed headline inflation rose 3.0% year-on-year (YoY) in September (consensus was 3.1%) while core CPI also rose 3.0% YoY (consensus was 3.1%). The cooler inflation readings were followed by signs of resilience as the S&P Global composite purchasing managers’ index (PMI) rose to 54.8 in October from 53.9.

Focus shifts to Fed meeting and Q3 earnings

This comes ahead of Thursday morning’s Federal Open Market Committee (FOMC) meeting, where a 25 basis point (bp) rate cut from the Fed is fully priced in. With no summary of economic projections (SEP) or forecasts to dissect and Fed Chair Jay Powell expected to cite labour market weakness and reiterate data dependence, Thursday’s FOMC meeting is not expected to be a significant market mover.

That sets the scene for third quarter (Q3) 2025 earnings to take centre stage this week with approximately 44% of the S&P 500 by market capitalisation set to report, including hyperscalers Microsoft, Meta, Alphabet, Amazon and Apple. Investors will zero in on artificial intelligence (AI) capital expenditure (capex) revisions (+35% next twelve months), monetisation proof, tariff mitigation, 2025–2026 guidance, and return on investment (ROI) inflection.

US-China trade talks progress

Finally, US and Chinese trade negotiators are reported to have reached a preliminary consensus on a framework trade deal over the weekend during talks in Malaysia, pending final approval by Presidents Trump and Xi at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea later this week.

Key elements include a pause on punitive tariffs, increased Chinese purchases of US agricultural goods like soybeans, enhanced cooperation on curbing fentanyl precursor exports, eased Chinese restrictions on rare earth exports, and potential reciprocal adjustments to advanced semiconductor export controls.

Both sides described the discussions as ‘candid and productive’ with US Trade Representative Jamieson Greer noting a ‘path forward’ to balance trade deficits and secure supply chains, while China’s Li Chenggang emphasised restoring policy predictability.

Following their reopening US equity futures responded positively. S&P futures spiked to a fresh record high of 6890 before settling 0.62% higher at 6870 while Nasdaq futures surged 210 points (0.82%) to 25,721.

Nasdaq 100 technical analysis

The rally from the September 22,977 low is viewed as an extending Wave V from the April 16,542 low. Within our preferred Elliott Wave framework, once a five-wave advance is complete, the expectation is for a correction to commence.

An initial indication that a Wave V advance is complete and that a correction has begun would be if the Nasdaq 100 were to see a sustained break or close below short-term support at 25,500 – 24,800. This would likely then be followed by a deeper pullback towards a band of support between 24,200 – 23,900.

Aware that while the Nasdaq 100 holds above short-term support at 25,500 – 24,800 and medium-term support at 24,200 – 23,950, allow for the uptrend in the Nasdaq to continue towards the next upside target at 26,000.

Nasdaq 100 daily chart

S&P 500 technical analysis

The rally from the September 6360 low is viewed as an extending Wave V from the April 4835 low. Within our preferred Elliott Wave framework, once a five-wave advance is complete, the expectation is for a correction to commence.

An initial indication that a Wave V advance is complete and that a correction has begun would be if the S&P 500 cash were to see a sustained break or close below short-term support at 6760 – 6740. This would likely then be followed by a deeper pullback towards a band of support near 6550.

Aware that while the S&P 500 holds above short-term support at 6760 – 6740 and medium-term support at 6550, allow for the uptrend in the S&P 500 to continue towards the next upside target at 7000.

S&P 500 daily chart

• _{Source: TradingView. The figures stated are as of 27 October 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}