Stocks on Hold Near Highs Awaiting Fed Speakers

Published as of: October 7, 2025, 9:24 a.m. ET

(Tuesday market open) The government may be shut but Wall Street's party isn't, at least not yet. Though major indexes took a slight pause this morning, they kicked off the week with new record highs driven by a deal between Advanced Micro Devices (AMD) and OpenAI. Five Federal Reserve speakers and a Treasury auction dominate today's calendar, with Fed minutes tomorrow afternoon and Fed Chairman Jerome Powell speaking early Thursday at a bank conference.

The Treasury auctions off a basket of 3-year notes later, with results likely before the close. That's followed by a 10-year note auction tomorrow. Demand could be closely scrutinized considering the drop in yields from summer peaks, Japan's election, and chances of more Fed cuts. "We expect at least one more rate cut this year and possibly two if the labor market deteriorates more," said Cooper Howard, director, fixed income strategy at the Schwab Center for Financial Research. "That should pull short-term rates lower. Longer-term rates are likely rangebound."

Stocks had another positive day Monday, led by a 5% gain for Tesla (TSLA) and a nearly 24% jump for AMD. This morning, focus again turned to the government shutdown as it started to affect U.S. air travel. Staffing shortages at the Federal Aviation Administration are causing widespread delays at major airports, CNN reported. Some planes have been delayed from taking off, and one control tower was closed yesterday afternoon at a major airport. "There's no end to the shutdown in sight," said Michael Townsend, managing director, legislative and regulatory affairs at Schwab.

1. Confidence surges, a possible warning sign: The market is up five months straight and valuations are historically high, leading to fear it's overbought. "One background concern is sentiment," said Liz Ann Sonders, chief investment strategist at Schwab, noting "frothiness" and a low put/call ratio that sometimes can signal over-confidence. In contrast, she noted that only four of the Magnificent Seven are outperforming the S&P 500 index year to date, and even Nvidia (NVDA)—the best performer in the Magnificent Seven—is only 45th on the list of S&P 500 stocks with the most gains this year. The Cboe Volatility Index (VIX) remained below 17 this morning, below the historic average of 20. Hedging is sluggish with major indexes at record highs, suggesting if there's some sort of negative catalyst most market participants are lined up on one side of the teeter totter.
    
2. Retail investors seek new names: The Schwab Trading Activity Index^™ (STAX) increased to 46.12 in September, up from its score of 43.69 in August. September saw Schwab's retail clients branch out from those traditional names and into higher-volatility, AI-adjacent stocks, some of which have made big moves recently. September brought several first-time entrants to the top 10 list, suggesting clients are casting a wider net, seeking additional upside from a market trading at all-time highs. The STAX far outpaced the S&P 500 index in September for the second month in a row, with Schwab clients continuing to get more aggressive after holding back earlier this year in the wake of the April tariff sell-off. Stocks enjoying the largest net-buys from Schwab clients tracked by STAX were Nvidia, Amazon (AMZN), and Oracle (ORCL), and the largest net-sells were Tesla, Apple (AAPL), and Alibaba (BABA), but a new entry into the top five was Opendoor (OPEN). The mid-month rate cut announced by the Fed, lighter-than-expected inflation data, and resilient retail sales all likely boosted investor confidence.
    
3. EV update as earnings approach: With Tesla's stronger-than-expected quarterly delivery numbers out last week, investors have a better sense of the EV market going into earnings season. General Motors (GM) and Tesla are expected to share quarterly tidings the week of October 20, followed by Ford (F) the week after and Rivian (RIVN) and Lucid (LCID) in early November. Tesla on October 22 typically carries the most weight, and for good reason considering its cars now account for more than 43% of U.S. EVs sold so far this year through September, according to CNBC, citing data from Motor Intelligence. GM is second to Tesla in EV sales, and EVs now make up more than 10% of all vehicles sold in the domestic market. On a market share basis, GM is taking a bigger slice, with its EVs now at a nearly 14% market share from 8.7% to begin the year, CNBC reported. Hyundai owns the bronze. One question is where EV sales go now that government tax credits have expired. This could mean bigger competition from hybrid models, where Toyota (TM) is a leader and which tend to cost less than true EVs. Toyota bet big on hybrids and it seems to be paying off, but investors get an update when that company reports November 5.

• Advanced Micro Devices added nearly 24% Monday and another 4% this morning after AMD and OpenAI announced an agreement for AMD chips to power OpenAI's artificial intelligence infrastructure. Under the agreement, OpenAI will work with AMD as a core strategic partner to drive large-scale deployments of AMD technology, the companies said. The deal also gives OpenAI a chance to take a 10% stake in AMD.
   
• Verizon (VZ) fell 5% yesterday, dragging down other telecom stocks, after announcing a PayPal (PYPL) veteran as its next CEO. Investors worried this might indicate the industry is tilting toward more promotions and perks, potentially hurting profitability, MarketWatch reported. Verizon has trailed competition in user growth, Yahoo! Finance reported.
   
• AppLovin (APP) dove 14% late Monday after Bloomberg reported that the Securities and Exchange Commission (SEC) is probing the mobile advertising company over its data collection practices. Shares bounced back 3% this morning.
   
• Tesla climbed 5.45% yesterday as the EV stock's rally continued and investors got excited about company hints at a new vehicle. Reuters reported that Tesla plans to introduce the vehicle today, a lower-cost model based on the Model Y.
   
• Bitcoin (/BTC) leaped to new record highs above $127,000 on Monday, pulling with it shares of crypto-related firms Coinbase (COIN) and Strategy (MSTR). October is usually the best month for bitcoin, and uncertainty related to the government shutdown is also possibly driving money flow into crypto. Bitcoin futures dipped slightly this morning but remain above $125,000.
   
• Constellation Brands (STZ) bubbled up 3.4% early today as the beer and wine company beat analysts' earnings and revenue expectations. The firm has been struggling due partly to tariffs and thanks to general weak demand for alcohol. Sales fell 15% year over year in the latest quarter, but the company did reaffirm guidance.
   
• Dell Technologies (DELL) rose 5% ahead of the open after the company raised its long-term annual revenue and profit forecasts on strong AI server demand, Reuters reported.
   
• Gold (/GC) hit another record high overnight as the Washington impasse continued and investors anticipated another Fed rate cut.
   
• Trilogy Metals (TMQ), a Canadian minerals exploring firm, soared more than 225% ahead of the open after the White House said the U.S. would take a 10% stake in the company, CNBC reported.
   
• IBM (IBM) rose 3% ahead of the open after it announced a partnership with Anthropic, another AI-related deal, MarketWatch reported.
   
• Home builder shares including DR Horton (DHI), KB Home (KBH), and Toll Brothers (TOL) all fell 1% to 2% in early action today as Evercore ISI downgraded all of them to In Line from Outperform, saying meaningful demand hasn't yet materialized in the sector despite modestly improved affordability.

Tariffs: Why the delayed impact? The U.S. began introducing its new tariff policies back in April, but the full impact has yet to be felt on the broader economy and may not happen for some time—or at all, said Michelle Gibley, director of international research at Schwab, in her new analysis. "Economic distortions from tariffs are still filtering through the global economy, but so are offsets such as fiscal and monetary stimulus, as well as spending on artificial intelligence," Gibley noted.

The dollar index ($DXY—candlesticks) got a bump yesterday from the Japanese election, which sent the yen lower on ideas that a new government there might push back on rate hikes and favor more fiscal stimulus. This might eventually support U.S. Treasuries, but they fell yesterday and the 10-year yield (TNX:CGI—purple line), which trades the opposite direction of Treasuries, gained four basis points. The weaker yield picture this year is one factor weighing on dollar values, and a lower dollar in turn has helped stocks.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

October 8: FOMC meeting minutes.
October 9: Expected earnings from Delta Air Lines (DAL), PepsiCo (PEP), and Levi Strauss (LEVI).
October 10: October University of Michigan Consumer Sentiment—preliminary. 
October 13: No major data or earnings expected.
October 14: Expected earnings from JPMorgan Chase (JPM), Johnson & Johnson (JNJ), Wells Fargo (WFC), Goldman Sachs (GS), Citigroup (C), Blackrock (BLK), Domino's Pizza (DPZ), and Albertson's (ACI).