To The Moon

Last Week's Recap

U.S. Market - A dramatic Sell-off

• Indexes: The week finished weak after a dramatic Friday sell-off. Both the S&P 500 and Nasdaq notched fresh record highs midweek, only to see gains erased in the strongest single-day decline since April after tariff headlines hit sentiment.

• VIX: The VIX spiked above 22, snapping nearly four months of calm, complacent grinding to new highs. The surge in volatility underscored a sudden demand for protection as risk appetite evaporated.

• Crypto: Crypto and crypto-exposed names were especially volatile — Bitcoin and Ethereum printed new all-time highs earlier in the week before capitulating on Friday’s risk-off move. Bitcoin plunged 6% Friday, breaking below $120,000, amplifying broader market stress.

• Trump’s tariff: An unexpected announcement that tariffs on Chinese goods could be raised (reports cited a 100% tariff proposal). Bespoke Investment Group calculates that about $2 trillion in value from the U.S. stock market was erased by Trump’s post.

• Shutdown: The U.S. government shutdown dragged into its 10th day on Friday. The Senate failed for a seventh time Thursday to pass dueling stop-gap funding proposals that would have put an end to the stoppage.

U.S. Sectors & Stocks — Rotation to Defense as Tech Takes a Hit

• Sectors: Friday’s broad sell-off saw Consumer Defensive as the lone gainer, reflecting a flight to safety as risk appetite faded. Technology and Communication Services were the weakest performers. For the week, nine of the eleven S&P 500 sectors declined, with Utilities (+1.28%) and Consumer Defensive (+0.18%) the only sectors posting gains, as investors favored defensive, dividend-heavy assets.

• AMD (AMD): OpenAI announced a strategic partnership, planning to deploy 6 gigawatts of AMD AI processors starting in late 2026. OpenAI was also granted warrants for up to 160 million AMD shares, vesting upon milestone achievements. Despite Friday's selloff, AMD's shares still skyrocketed more than 30%.

• Tesla (TSLA): Introduced stripped-down versions of the Model Y and Model 3 at lower price points to stimulate demand. However, sentiment remained pressured as the NHTSA opened a new probe into FSD safety, leading to a 3.8% weekly decline.

• Oracle (ORCL): Initially fell on reports claiming it generated just $125M gross profit from roughly $900M in AI cloud server rentals with Nvidia chips. Shares later rebounded after Fox Business challenged the accuracy of the report, allowing Oracle to finish the week higher.

• AppLovin (APP): Plunged 16.5%, after Bloomberg reported that SEC is investigating the mobile advertising tech company's data collection practices,raising regulatory concerns.

• Dell Technologies (DELL): Increased its long-term sales and earnings growth estimates, thanks to surging demand for AI computers. Dell stock logged a weekly gain with 7%.

• Rare Earth Miners (MP, USAR): MP Materials rose 10%, and USA Rare Earth jumped 26%, both hitting record highs after Trump threatened new tariffs, reigniting interest in domestic supply chains.

• Applied Digital (APLD): Rallied 28% after reporting a narrower-than-expected quarterly loss (-$0.03 vs. -$0.13 est.) and revenue of $64.2M vs. $46.1M est. The company also finalized a new lease deal with CoreWeave, boosting confidence.

• Qualcomm (QCOM): Dropped nearly 10% as China launched an antitrust investigation, clouding its prospects in a key market.

• IREN (IREN): Saw a 18.45% increase, driven by new multi-year cloud services contracts for Nvidia GPUs, highlighting its strategic shift from Bitcoin mining to AI cloud services.

Hong Kong Market - HSI fell over 3%

• HSI: The Hang Seng Index logged a five-day losing streak, sliding 3.1% for the week. Trading volume was noticeably thinner as Mainland China observed the National Day “Golden Week” holiday, reducing southbound liquidity and amplifying volatility.

• Tech names: Heavyweights Baidu, Tencent, Alibaba, and JD.com weighed heavily on the index. Sentiment was dampened by continued profit-taking, sector rotation, and spillover weakness from global tech names.

• HSBC / Hang Seng Bank deal: HSBC (0005.HK) proposed to privatize Hang Seng Bank (0011.HK) at HK$155 per share, a 30% premium. Hang Seng Bank surged 26.1%, while HSBC dropped 5.8% on concerns over the deal’s capital impact.

• ZTE Corporation (0763.HK): Jumped 16.4% after launching its Co-Sight super intelligent system at a global AI summit in Milan, boosting investor confidence in the company’s AI ambitions.

Singapore Market - STI opposed global market headwind

• STI: The Straits Times Index (STI) edged 0.34% higher, outperforming global peers amid broader risk-off flows.

• Raffles Medical (AIY.SI): Gained 3.63% for the week, supported by improving sentiment and optimism surrounding a major Keppel (BN4.SI) infrastructure project.

• Top Glove (BVA.SI): Returned to profitability with Q4 net profit of RM38.6 million, reversing a loss of RM6.6 million a year ago and marking a full-year turnaround for the glove manufacturer.

Australian Market - ASX 200 lost 0.32%

• XJO: The ASX 200 (XJO.AU) slipped 0.32%, as commodity-linked sectors weakened. A degree of calm in the Middle East triggered pullbacks in oil and gold prices, pressuring energy and materials stocks.

• Mining & Macro Headwinds: Shares of major miners declined further amid uncertainties surrounding BHP’s dispute with China, adding to sector drag despite stabilizing global sentiment.

The Week Ahead

Macro Factors - Tariff Tensions, and Shutdown

• Tariff Rhetoric Returns: Renewed tariff threats have rattled markets, trimming froth from recent highs. Investors will gauge whether last week’s sell-off was a brief shakeout or the start of sentiment deterioration ahead of earnings season.

• Market Tested: With indices still hovering near records, all eyes are on whether institutional flows will continue supporting pullbacks—or if rising geopolitical risk shifts the tone to risk aversion.

• Government Shutdown: Oct. 15 looms as a critical date—federal workers’ next payday and potentially the first missed check. Polymarket now assigns just a 6% probability of a resolution before then.

• Data Delays: The CPI report, initially scheduled for Oct. 15, has been postponed to Oct. 24 after selective staff recalls at the Bureau of Labor Statistics. Markets remain in a “data drought,” heightening sensitivity to macro headlines and Fed speak.

Earnings

• Big banks take center stage in the week ahead. Capital markets rebound and a resurgence in dealmaking set the stage for strong bank earnings.

• Citigroup (C), Goldman Sachs (GS), Wells Fargo (WFC), JPMorgan Chase (JPM), Bank of America (BAC) and Morgan Stanley (MS) are due out with their results Tuesday and Wednesday.

• The financials sector in the S&P 500 is expected to report a blended earnings growth rate of 12.9%, the fourth biggest contributor to quarterly earnings growth behind information technology, utilities and materials, according to FactSet. Meanwhile, the overall index is set to post a blended earnings growth rate of 8.1%.

• Outside of the financial services sector, big names to watch include Johnson & Johnson (JNJ) and Domino's (DPZ) on Tuesday and Taiwan Semiconductor Manufacturing (TSM) on Thursday.