Treat After Trick: Stocks Rebound on Amazon, Apple

Published as of: October 31, 2025, 9:09 a.m. ET

(Friday market open) Halloween apparently arrived one day early on Wall Street, as double-digit losses in Meta Platforms (META) spooked investors and prompted Thursday's sell-off. The scare didn't last long, however, as major indexes turned green this morning on upbeat results from Amazon (AMZN) and Apple (AAPL). Those two wrapped up five Magnificent Seven earnings reports in two days, all of which surpassed analysts' estimates and reinforced ideas that spending on AI is accelerating.

With the government still closed, the market's data vacuum continues. Tomorrow is when funding for the Supplemental Nutrition Assistance Program (SNAP), which provides food stamps and other assistance for about 42 million Americans, is expected to run out, possibly raising stakes for the Senate. Even if D.C. stays dark, next week offers some breadcrumbs, including the ISM Manufacturing PMI for October on Monday, the ADP employment report on Wednesday, and University of Michigan preliminary November consumer sentiment reading on Friday.

Stocks backtracked yesterday due to worries about Meta's spending, a more hawkish Federal Reserve, and lack of chip-related progress in trade talks with China. Fed Chair Jerome Powell popped the market's rate cut balloon Wednesday, but futures trading still builds in a 69% chance of a 25-basis point cut in December, according to the CME FedWatch Tool. "We were not at all surprised by the 'hawkish cut,' having believed the market had gotten ahead of itself in expecting a continued series of cuts," said Liz Ann Sonders, chief investment strategist at Schwab. Several Fed speakers are scheduled today, including Atlanta Fed President Raphael Bostic at 11 a.m. ET, perhaps offering more color on what Powell called "strongly differing views" at this week's Fed meeting.

1. Chip sector wilts on China, but AI spending intact: Some of this week's massive rally in shares of Nvidia (NVDA)—which rose nearly 15% in the week that ended on Wednesday—reflected ideas that the U.S. would ease chip export restrictions on China that are hurting business for Nvidia and other firms. In its last earnings report, Nvidia guided for no chip sales to China this year, but it could be interesting to see if that changes for 2025 or 2026 when it reports November 19. A lot could depend on negotiations to come, but Trump said that's Nvidia's role, not his. "The U.S. and China agreement takes the temperature down, allowing resumption of soybean sales and rare earth flows, but did not allow China to access Nvidia's Blackwell chips," my colleague Sonders said. "But these do not yet represent structural changes, and the agreement could just be a short-term pause in a longer-term supremacy struggle." Meanwhile, the massive AI spending boosting chip stocks didn't show signs of losing pace. Reports from Alphabet, Meta, and Microsoft showed a collective $78 billion in capital expenditures just last quarter, an 89% year-over-year increase, with notable focus on data center construction and graphics processing units, or GPUs. All three companies increased forecasts for spending. Chip companies tend to benefit from this, which is one reason the PHLX Semiconductor Index^TM was up more than 45% this year before losing 1.5% yesterday.
    
2. Bitcoin under pressure: Bitcoin futures fell more than 3% Thursday to the lowest level in two weeks as the coin flirted with a key support level around $107,000. Bitcoin had been stabilizing after its historic selloff on October 10, bouncing around between long-term and shorter-term moving averages during a leverage reset. Prior to Powell's surprisingly hawkish comments Wednesday, selling pressure had weakened and demand had been returning—although not to the level of demand seen during the move to a record high early in the month. According to data provider Glassnode, open interest in perpetual futures on centralized exchanges has fallen nearly 30% since October 10 and overall trade volumes have declined, indicating that institutional demand remains more selective than aggressive, while continued heavy selling by long-term holders signals "waning conviction." The selling appears to be spilling over into other coins. Solana futures were down nearly 7% as of late Thursday, while ether was down nearly 5%.
    
3. Taking Wall Street's temperature: The Cboe Volatility Index (VIX) inched higher earlier this week but cratered 5% early Friday to just above 16. A big jump toward 20 or a dip in the S&P 500's Relative Strength Index (RSI) toward 50 from the current 60 could suggest weakness ahead. Another metric to watch is breadth, which narrowed substantially Thursday after climbing earlier in the week. By late Thursday, only 41% of all S&P 500 stocks traded above their 50-day moving average. And only 54% were above their 200-day moving average, the lowest since October 10. Weakening breadth implies fewer stocks participating in the rally, perhaps putting more pressure on mega caps to plough higher for the long surge to last. On a positive note, despite the S&P 500's 1% slide yesterday, the number of declining stocks barely outpaced advancing ones, a change from Wednesday when the index closed flat but far more stocks declined than advanced. The S&P 500 index is up 2% for the month while the Nasdaq is up 4.1%.

• Apple: Shares jumped 2% in pre-market trading after the company reported slightly better-than-expected earnings per share and revenues in line with consensus, along with better-than-expected guidance for its fiscal first quarter. iPhone sales came in a bit below estimates, but up from a year ago, and margin improved. The stock has been making all-time highs recently, helped by signs of better iPhone demand and hopes for improved U.S. relations with China.
   
• Amazon: Shares soared more than 12% in pre-market hours as earnings per share of $1.95 easily outpaced expectations of $1.58 and revenue of $180.2 billion topped consensus of $177.8 billion. Amazon Web Services, the leading cloud platform, saw 20% growth, a sequential improvement from 18% the prior quarter and one likely appreciated by bulls who've worried about market share intrusions by Alphabet and Microsoft. It was the fastest AWS growth in 11 quarters.
   
• Nvidia and many other semiconductor stocks wilted Thursday after President Trump wrapped up trade talks with his Chinese counterpart. The recent rally for Nvidia, which rose nearly 15% from last Wednesday to this Wednesday, reflected hopes that the U.S. would ease restrictions on chip exports. Trump said Nvidia would continue conversations with China, Bloomberg reported. This morning, shares bounced 2% after Nvidia announced it's working with the South Korean government to expand that country's AI infrastructure.
   
• Marvell Technology (MRVL) jumped 5.4% in early trading, boosted by positive comments its partner Amazon made on Amazon's earnings conference call. Marvell provides Amazon data centers with semiconductors, including custom AI products, which Amazon said are seeing strong adoption.
   
• Western Digital (WDC) posted 11% gains before the open as the data storage firm reported a doubling in fiscal first-quarter profit and a 27% rise in revenue. AI has accelerated data creation, the company said.
   
• Meta Platforms, which fell 11% yesterday, rose 1.5% in pre-market action. Investors sold off shares yesterday on anxiety about the firm's ability to translate heavy AI spending into profit down the road. Shares were downgraded by more than one analyst. It was the worst day for the stock in three years.
   
• Reddit (RDDT) soared 11% in early trading after the company topped earnings estimates and saw daily active users climb 19% in its latest quarter, ahead of the gain analysts had expected.
   
• Bitcoin (/BTC) rebounded 3.5% this morning as risk-on sentiment appeared to roar back across markets. Futures have fallen three days in a row. Shares of stocks linked to crypto, including Coinbase (COIN) and Strategy (MSTR), which both reported positive earnings, climbed 4% to 6%.
   
• Netflix (NFLX) climbed nearly 3% ahead of the open after announcing a 10-for-one stock split, CNBC reported.
   
• FactSet's weekly update on third quarter earnings progress is due by midday, and investors might want to check to see if it's budged above last week's S&P 500 earnings growth estimate of 9.2%.

Dividends and compounding: A dividend reinvestment plan, or DRIP, is the process of automatically reinvesting dividends into additional whole and fractional shares of a company's stock. This is a common way to put compounding into action. Learn more in our latest look at investing in stocks.

Navigating risk in mega caps: Many investors worry about "concentration risk," which means having too many proverbial eggs in one basket. Mega-cap concentration in the S&P 500 index recently reached its highest level in more than 35 years. Our new article discusses three ways of managing mega-cap concentration risk in your portfolio. 

Q&A with Kevin: Schwab's experts get lots of questions. Join Kevin Gordon, Schwab's head of macro research and strategy, as he answers some things on investors' minds, including whether foreigners will buy U.S. debt, if AI firms are spending too much, and whether the price-to-earnings, or P/E, ratio is as important as it was in the past.

This one-month chart shows two indexes that are rarely compared directly, the Dow Jones Industrial Average ($DJI—candlestick) and the PHLX Semiconductor Index (SOX-purple line). Aside from Nvidia's inclusion in the DJIA, the two live in different worlds, with the DJIA seen reflecting the older U.S. industrial economy. What's interesting is that more than once over the last month, the DJIA began declining just a day or two ahead of weakness in the SOX. It also climbed at mid-month right before the SOX took off. Is it just coincidence, or something to keep watching? Time will tell.

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

November 3: October ISM Manufacturing Index and expected earnings from Palantir Technologies (PLTR), Hims & Hers Health (HIMS), Clorox (CLX), and Diamondback Energy (FANG).

November 4: September factory orders, September job openings (JOLTS), and expected earnings from Shopify (SHOP), Uber Technologies (UBER), Eaton Corporation (ETN), Pfizer (PFE), Spotify (SPOT), Advanced Micro Devices (AMD), Arista Networks (ANET), and Amgen (AMGN).

November 5: October ADP employment, October ISM Services PMI^®, and expected earnings from McDonald's (MCD), Novo Nordisk (NVO), AppLovin (APP), Qualcomm (QCOM), Arm Holdings (ARM), and DoorDash (DASH).

November 6: Challenger October job cuts and expected earnings from AstraZeneca (AZN), ConocoPhillips (COP), Cummins (CMI), Airbnb (ABNB), and Datadog (DDOG).

November 7: Preliminary University of Michigan Consumer Sentiment and expected earnings from Constellation Energy (CEG), Duke Energy (DUK), and Enbridge (ENB).