Everything to Know about Macro and Markets
Markets ended the week on a strong note, with all major indexes hitting record highs on Friday. The Dow Jones Industrial Average (DJIA) ended the week up 2.20%, the S&P 500 (SPX) gained 1.92%, and the large-cap tech benchmark Nasdaq-100 (NDX) rallied 2.18%.
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MAGnificent Gains
Stocks surged on Friday, driven by a cooler-than-expected inflation report, which reinforced expectations that the Federal Reserve will continue with rate cuts this year. Gains were also bolstered by strong corporate earnings – notably from Intel (INTC) and Ford (F) – and optimism surrounding the upcoming AI-focused tech earnings week.
Following Tesla’s (TSLA) report last week, five more “Magnificent Seven” giants – Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (META), Apple (AAPL), and Amazon (AMZN) – are scheduled to release their quarterly results. These results will very likely set the tone for the rest of the tech stocks for the coming weeks, at least until Nvidia’s (NVDA) report in mid-November. Markets are expecting a show of strength, with investors sending the Roundhill Magnificent Seven ETF (MAGS) to a new all-time high.
Quantum, Quantified
The White House may have sparked a new leg in the tech rally last week. According to media reports, President Trump’s administration is exploring equity stakes in U.S. quantum‑computing companies as part of a new strategic technology initiative. Bloomberg, Wall Street Journal, and other sources reported that the Trump admin and the U.S. Department of Commerce were in talks with IonQ (IONQ), Rigetti (RGTI), D-Wave Quantum (QBTS), and Quantum Computing Inc. (QUBT) about possible government equity stakes valued at a minimum of $10 million per company in exchange for federal funding through the CHIPS R&D Office.
The news triggered a surge across the quantum-tech universe, lifting stocks that were previously under heavy selling pressure. Notably, these small caps are extremely speculative bets, as highlighted by their inclusion in the Roundhill Meme Stock ETF (MEME) – and they aren’t even its largest holdings. Still, as the cloud and AI rallies demonstrated, the abundance of meme speculation doesn’t mean the underlying tech is not the next big thing, and strong government interest – with funds flowing into the tech – also supports stocks of the firms that may soon see actual quantum profits, such as IBM (IBM) and Alphabet’s (GOOGL) Google.
A Light in the Data Darkness
September’s headline CPI rose by 0.3% month-over-month, while Core CPI inched up by 0.2% – both a tad below expectations. The benign data further convinced market participants that the Federal Reserve is about to deliver its second consecutive rate cut at its meeting next week. Moreover, the odds of three cuts this year – including a prospective one in December – jumped to over 85%.
Although the central bank’s September “dot plot” showed that on average, officials supported a rate reduction of 0.75% in total for 2025, policymakers continued to stress their data dependency in making these decisions. With the government shutdown switching off much of the economic releases, investors worried that the Fed may prefer waiting out the data darkness. Now, the CPI has partly dispelled these worries, shining a bright data light – luckily, in the right direction.
Stocks That Made the News
▣ Intel (INTC) soared after reporting better-than-expected revenue and gross margin, and significantly beating the consensus EPS forecast. The company posted a net income of $4.1 billion, reversing a substantial loss from the previous year. Although the company didn’t lift its conservative Q4 guidance, which is broadly in line with consensus, it emphasized steady progress and operational improvements with a focus on AI and foundry services, drawing analyst and investor praise.
During the third quarter of 2025, Intel received $5.7 billion in funding from the U.S. government as part of a previously announced $8.9 billion agreement, underscoring strong government commitment to domestic chip manufacturing. Additionally, the company eliminated $4.3 billion in debt during the quarter and said it plans to repay upcoming maturities through next year, which investors read as a positive signal on INTC’s balance sheet discipline.
▣ IBM (IBM) initially saw a sharply negative reaction to its earnings release – which was was quickly wiped out the next day – as some of the results disappointed due to increasingly elevated expectations following its pivot to AI. The tech behemoth slightly surpassed revenue expectations – with a usual narrow beat again perceived as a weakness, despite its 7% YoY increase being the fastest in several years – and beat EPS expectations by a wide margin.
All business segments showed acceleration, highlighting the strength of IBM’s business model and portfolio: software grew 9% in constant currency, while automation rose by 22%, infrastructure by 15%, and the previously lagging consulting segment returned to growth, reflecting strong demand for AI services. AI and hybrid cloud continued driving IBM’s growth, with over $9.5 billion in AI-related book of business to date. Consulting’s generative AI book of business reached $1.5 billion in the quarter, and over 200 consulting projects are using digital workers at scale.
The main reason for a knee-jerk sell-off on Thursday was a deceleration in its hybrid-cloud unit – built around its Red Hat business – from 14% to 12% (in CC). This business is a major focus point for investors and one of the software segment’s key reacceleration drivers – but Q3 may be less telling regarding the trend, as it is a seasonally weak quarter.
Year-to-date, IBM generated $7.2 billion of free cash flow, the highest nine-month free cash flow margin in reported history. The company reported that its productivity initiatives are ahead of schedule with an expected annual run rate savings of $4.5 billion exiting 2025. Additionally, Q3 marked the ninth consecutive quarter of operating pre-tax margin expansion, with segment profit margins expanding across infrastructure, software, and consulting.
Following the strong results, IBM raised its full-year 2025 outlook, guiding for revenue growth of more than 5%, adjusted EBITDA growth in the mid-teens, and free cash flow of about $14 billion for the year. Software revenue is expected to approach double digits, automation to remain in double digits, and Red Hat to grow in the mid-teens.
IBM is one of the strongest-conviction holdings in the TipRanks Smart Investor Portfolio, delivering a gain of over 46% since November 20, 2024 – roughly triple that of the S&P 500. On Friday, the stock’s rebound was also lifted by news on IBM’s progress in quantum computing – amid reports on possible government prioritizing the sphere – after it announced it has the ability to run a key quantum computing error correction algorithm in real time on AMD’s (AMD) processors. IBM has a multi-year plan to build a practical quantum computer by 2029, placing the company at the forefront of the next-tech innovation.
▣ Ford (F) saw its stock soar by more than 18% for the week after the company’s earnings report showed strong operational results, beating expectations and demonstrating resilient core profitability. Revenue was up 9% year-over-year to a record $50.5 billion, with adjusted EPS coming in at $0.45, way ahead of $0.35 consensus. Commercial trucks continued to drive top-line growth and hybrid vehicles posted robust performance, while the EV segment’s loss widened. Although the automaker trimmed its full year 2025 outlook due to supply chain disruptions from the Novelis aluminum plant fire, investors focused on record revenue and resilient execution despite macro and production pressures.
▣ Tesla (TSLA), on the other hand, dropped post earnings despite record sales and deliveries. Revenue rose 12% year-over-year, but net income tumbled 37% as operating expenses surged 50% and tariffs wiped out over $400 million from the bottom line. Coupled with price cuts meant to stimulate demand, these led to significantly compressed margins.
The report wasn’t as negative as the bottom line suggests, with free cash flow rising to nearly $4 billion, a quarterly record that boosted Tesla’s cash reserves. The energy segment also shined, with storage revenue surging 44%, driven by record deployments, and new solutions for utility-scale installations driving investor enthusiasm. Robotaxi and Optimus programs also saw significant progress, while AI chip design capex is projected to increase amid advances in manufacturing with Samsung (SSNLF) and TSMC (TSM). However, the core automaking business metrics underwhelmed, underscoring how thin the margin for error has become, despite operational strength.
Upcoming Earnings and Dividend Announcements
The Q3 earnings season is now in its busiest stretch, with many notable releases scheduled for the coming days. All eyes this week will be on the quarterly releases of Microsoft (MSFT), Alphabet (GOOGL), and Meta Platforms (META) on Wednesday, and of Apple (AAPL) and Amazon (AMZN) on Thursday.
Also in spotlight will be the reports of KLA (KLAC), Starbucks (SBUX), PayPal Holdings (PYPL), Eli Lilly & Co (LLY), Caterpillar (CAT), Boeing (BA), Coinbase Global (COIN), EMCOR Group (EME), and American Tower (AMT), as their results can send signals about the health of their respective industries and the trends in their markets.
Other important releases include Cadence Design (CDNS), Waste Management (WM), Celestica (CLS), FTAI Aviation (FTAI), Visa (V), UnitedHealth (UNH), Seagate Technology (STX), SoFi (SOFI), Check Point (CHKP), ServiceNow (NOW), Verizon (VZ), eBay (EBAY), Cognizant (CTSH), Mastercard (MA), Gilead Sciences (GILD), Roblox (RBLX), Howmet Aerospace (HWM), Quanta Services (PWR), Reddit (RDDT), Exxon Mobil (XOM), AbbVie (ABBV), Chevron (CVX), United Parcel (UPS), Stryker (SYK), Comcast (CMCSA), and many others.
Ex-dividend dates are coming this week for BNY Mellon (BK), Fastenal Company (FAST), Citizens Financial (CFG), Carrier Global (CARR), Constellation Brands (STZ), Realty Income (O), AES (AES), Texas Instruments (TXN), Morgan Stanley (MS), Zoetis (ZTS), Costco (COST), and other dividend-paying firms.
For additional exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.