Earnings Strength and Trade Calm Power Wall Street Rally

Key Takeaways:

*Wall Street rallied sharply as strong corporate earnings and easing U.S.–China tensions fueled broad-based risk appetite.

*Tech stocks led gains, with the Nasdaq hitting multi-month highs on robust semiconductor momentum and upbeat AI demand.

*With trade risks receding and Fed policy expected to stay dovish, market sentiment remains firmly tilted to the upside.

Market Summary:

U.S. equities staged a robust rally this week, with Wall Street and the Nasdaq Composite advancing sharply as strong corporate earnings and easing geopolitical tensions revived risk appetite. Investors looked past persistent domestic uncertainties, including the extended government shutdown and lingering concerns over regional bank stability, focusing instead on a wave of upbeat third-quarter results. The S&P 500 surged to multi-month highs, while the Nasdaq outperformed, driven by a resurgence in technology shares and a renewed sense of optimism surrounding the U.S.–China trade outlook.

Earnings momentum remains the dominant driver of sentiment. According to Bloomberg Intelligence, 85% of S&P 500 companies that have reported so far have surpassed consensus estimates, prompting upward revisions to aggregate Q3 earnings growth now seen at 9.3% year-on-year. The tech sector continued to lead the charge, with the Philadelphia Semiconductor Index marking a fresh all-time high amid robust gains in chipmakers such as Micron, KLA Corp, and ON Semiconductor. This reflects growing conviction that AI-related infrastructure spending and resilient digital demand will sustain earnings strength even as broader macro conditions soften.

Another key catalyst has been the de-escalation in the U.S.–China trade rhetoric, offering relief to markets weary of prolonged uncertainty. Treasury Secretary Scott Bessent’s comments that relations have “stabilized” and President Trump’s hints that the planned 100% tariff on Chinese imports may not proceed helped calm fears of a full-blown trade war. The administration’s focus on narrower, negotiable issues such as rare earths, fentanyl, and agricultural trade suggests a more pragmatic tone in bilateral discussions, lifting sentiment across export-sensitive sectors.

While downside risks persist ranging from fiscal gridlock to lingering concerns about U.S. credit conditions the market has chosen to emphasize the positives for now. Investors will turn next to the delayed September CPI data due Friday, a key indicator that could shape expectations ahead of the Federal Reserve’s October policy meeting. For the moment, though, the combination of strong earnings, softer trade rhetoric, and a dovish Fed backdrop continues to create a powerful tailwind for Wall Street’s rally.

Technical Analysis

Nasdaq, H4

Nasdaq (NDX) has extended its rebound, with price reclaiming the 25,000 handle and testing the upper boundary of its recent consolidation range. The index remains supported by a sustained series of higher lows, maintaining a constructive medium-term structure.

The latest advance follows a strong defense of the 23,300–23,500 support zone, aligned with the 78.6% Fibonacci retracement of the prior correction. A sustained break above 25,100 would confirm a bullish continuation pattern, potentially opening the path toward the 1.272 Fibonacci extension near 27,360. Conversely, failure to hold above 24,700 would expose the index to a corrective pullback toward 23,900.

Momentum indicators lend moderate support to the bullish outlook. The RSI is trending above the neutral 50 level, indicating improving buying momentum, while the MACD has crossed into positive territory, signaling a potential resumption of upward trend strength.

Overall, the Nasdaq maintains a constructive technical posture within its broader uptrend. A decisive breakout above 25,100 would reinforce bullish conviction, while consolidation above 24,700 remains key to sustaining near-term momentum.

Resistance Levels: 112,450.00, 117350.00

Support Levels: 103650.00, 98,6450.00