Closing Recap

Monday, October 13, 2025

U.S. stocks rallied in a major way on Monday, recovering a good portion of Friday’s pullback on trade/tariff concerns after President Trump (and China) softened their tone about trade with the President saying, “Don’t worry about China, it will all be fine!” in a social media post on Sunday. The weakness came after Trump stated late Friday the US would impose a 100% additional tariff on Chinese goods, as well as export controls on “any and all critical software” beginning Nov. 1. His comments were in response to China late last week announcing a drastic set of confrontational trade tariff-quota rules on the US and global trade allies. China this weekend also clarified their comments saying the new controls are NOT a full export ban and applications that “meet regulations” will be approved. We will see, but for the time being, Wall Street was pleased with the headlines and rallied markets in another “buy the dip” moment. Recall coming into Friday the S&P had gone 33 trading sessions without a +/- 1% move, 48 sessions without a -1% move, and 119 without a -2% drawdown, so Friday was seen a “reset”. Focus this week now turns to earnings with big banks reporting starting tomorrow.

Technology, Materials and Consumer Discretionary were outperformers among S&P sector ETFs where ten of eleven sectors closed higher after Friday’s declines, while defensive Health Care, Real Estate and Consumer Staples paced the underperformers. The big momentum sectors that have been driving investor interest through the last few weeks (and month) such as technology related AI plays (semis, data centers), nuclear/Ai related power and colling names (OKLO, VRT, NBIS), quantum compute names (RGTI, IONQ, QBTS), and most recent “hot” sector of rare earth metal names (CRML, MP, UAMY, USAR) saw massive spikes higher again today as markets partially rebounded following Friday’s tariff/trade war fears.

Beyond trade headlines, Wall Street is bracing for a busy and uncertain week ahead. Still, there is no market concern about the potential economic impact as the government shutdown rolls into Day 13 today as sides are no closer to an agreement then when it started, raising the risk that many federal workers could miss their Oct. 15 paycheck if a funding deal isn’t reached. This week also kicks off the start of earnings season, dominated by big banks/financials (JPM, C, WFC, GS all expected to report on Tuesday, BAC, MS, SYF, PNC Wednesday and SCHW, USB, KEY, BK, TRV Thursday).

In one of the interesting stories this morning, JP Morgan said it will invest $10 billion directly into companies vital for U.S. national security, such as defense and AI firms. The bank aims to facilitate $1.5 trillion in investments over 10 years for companies critical to national economic security. Previously, JPM and GS agreed to lend $1 billion to MP Materials, the biggest rare-earth producer in the U.S. Among the companies JPM said it could invest in are producers of rare earths, the minerals needed to make computer chips, electric vehicles and other technologies. The bank said the companies it invests in will be primarily based in the U.S.

• Oil prices bounced off five-month lows Friday, as investors focused on potential talks between the presidents of the United States and China that could ease trade tensions. U.S. WTI crude oil futures settle at $59.49/bbl, up $0.59, or 1.00%, bouncing off 5-month lows and Brent Crude futures settled at $63.32/bbl, up $0.59, or 0.94%. Separately, OPEC forecasts global oil demand growth in 2025 at 1.30M bpd (vs. prior forecast 1.29M bpd), according to its monthly report while leaves forecast for global oil demand growth in 2026 unchanged at 1.38M bpd.

• In Casinos & Gaming: shares of WYNN, LVS, MLCO, MGM were weak after Jefferies said citing industry sources and checks, Macau’s gaming revenue for the seven days ending October 12, which includes the end of the Golden Week holiday period, was up 3% y/y or down -46% w/w and month-to-date ADR of MOP804M implies a 5% y/yr decline.
• In Food/Grocery: SFM was upgraded to Outperform from Sector Perform while lower PT to $148 from $176 saying since hitting a peak in June, shares are off ~42%, underperforming grocery peers by ~31% and the market by ~54% over that time frame as risk/reward is now attractive. BYND shares tumbled after announcing an early settlement of an exchange offer for convertible bonds as nearly 97% of its bondholders agreed to swap their old debt for new notes and shares.
• In Restaurants: SHAK was upgraded to Hold from Underperform at Jefferies (tgt to $95 from $110) and PTLO was downgraded to Hold from Buy (tgt to $6 from $10) in restaurant preview saying they see moderate downside risk to 3Q comp sales as industry data softened through Sept and expect in-line to moderately lower comp sales across our coverage. That said, they believe investor expectations have moderated, limiting stock downside somewhat. Said they continue to prefer MCD, BROS, CAVA and WING as we expect MCD to benefit from trade down/increased value offerings and BROS, CAVA and WING to remain relative winners in a soft fast causal backdrop.

• In Oil & Gas Equipment: Barclays downgraded a handful of names in the sector, cutting LBRT to Equal Weight from Overweight (tgt to $12 from $14), PTEN to EW from OW (tgt to $6 from $7), PUMP to EW from OW (tgt to $5 from $6), saying that despite a "still-softening" lower 48 completions market, with frac fleets down 20% since mid-July, valuations for some onshore energy services stocks have risen in the past month on distributed power exposure. This exposure it now fully reflected in current valuations, as they move to the sidelines on the pressure pumpers, anticipating both activity and pricing declines in the completions market over the next several quarters.

• In Financial Services: FICO was downgraded to Perform from Outperform at Oppenheimer; RBC Capital previewed MCO Q3 earnings saying results should significantly beat consensus estimates, leading to an upward revision of FY25 guidance, driven by robust billed issuance growth. However, RBC estimates MA’s ARR growth to remain at 8% (flat sequentially), despite easier. In auto lending (SYF, ALLY, CACC), @Barchart tweets: "Auto Loan Delinquency Rate is at its highest level in 14 years.” TREE shares fell Monday following the unexpected death of Chairman, and CEO Doug Lebda in an ATV accident.
• In FinTech: PYPL was downgraded to Sell at Goldman Sachs with $70 tgt as believes faces several Transaction Margin headwinds next year, including: 1) continued interest rate headwinds; 2) lapping of the reacceleration of their credit products; and 3) the lapping of targeted repricing benefits in Braintree. Goldman also downgraded MQ to Sell from Neutral (tgt to $5 from $7.50) saying believes the company’s customer concentration issues with XYZ are likely to be back in focus where the company will add a new issuer processing partner, which likely creates a potential long-term headwind to the partnership.
• In REITs: Jefferies downgraded shares of CUZ to Hold saying its outsized geographic concentration in Sunbelt markets (~67% of ABR in Austin and Atlanta) limits exposure to secular AI tailwinds; downgraded HIW to Hold saying while the co continues to lease space across its portfolio, it is missing out on broader secular tailwinds that could accelerate momentum and downgraded DEA to Hold saying a high cost of capital and ~97% leased portfolio limits growth potential. DEA is heavily levered to federal tenants. Jefferies upgraded SLG to Buy saying the company has effectively reinvested in its Midtown core, positioning the portfolio to benefit from strong post-COVID office recovery tailwinds. KRC was also upgraded to Buy at Jefferies saying San Francisco is developing into the epicenter of AI activity and KRC holds ~42% exposure to this market.

• PGEN announces long-term follow-up results highlighting ongoing durable complete responses after treatment with PAPZIMEOS; 15 out of 18 complete responders (83%) demonstrate continued complete response with median follow-up of 36 months.
• SRRK shares fell after late Friday (10/10), NVO received an inspection classification letter from the FDA pertaining to its Bloomington, Indiana fill-finish facility (previously owned by Catalent). Cantor notes that Novo’s fill-finish facility is the sole provider of $SRRK’s apitegromab. Non-compliance at this facility is the reason that apitegromab has not been approved for patients with SMA, a severe orphan indication.
• TVRD shares tumbled after saying its experimental drug, TTI-101, failed to meet goals in a mid-stage trial on patients with idiopathic pulmonary fibrosis; the trial evaluated TTI-101 as a standalone treatment or in combination with Germany-based Boehringer Ingelheim’s nintedanib in 88 patients.

• In Rare Earth/Materials: shares of CRML, MP, METC, TMC, TMQ, UAMY, USAR absolutely soar as well as lithium co’s LAC and uranium UUUU following fresh trade tensions between the US and China after Beijing’s export restrictions on rare earths fueled bets on alternative suppliers. The Pentagon is buying $500 million of cobalt, $245 million of antimony, and $100 million of tantalum, per FT.
• In Precious Metals: a strong rebound for gold and silver prices; NEM was upgraded from Neutral to Buy at Goldman Sachs and raised tgt to $104.30 from $77.30 saying it trades at a discount vs peers and near-term FCF yields of ~10% also remain attractive vs peers, before improving to ~13% as projects complete.
• In Industrial Metals: copper producers FCX, SCCO, TECK rebound along with copper prices after dropping more than 3% on Friday when President Trump threatened sharply higher tariffs on Chinese imports. Copper prices recovered as hopes of easing trade tensions between the United States and China and stronger Chinese imports of the industrial metal lifted sentiment.

• In Quantum Compute: IONQ announced a significant advancement in quantum chemistry simulations, demonstrating the accurate computation of atomic-level forces with the quantum-classical auxiliary-field quantum Monte Carlo (QC-AFQMC) algorithm; the whole group soared again as this momentum sector pushes higher RGTI, QBTS, QMCO, QUBT).
• In Hardware: Jefferies said in a note that tariffs could come back to haunt AAPL If it has to pay 130% tariff on est. ~9M iPhone 17 imported from China, the potential FY26 EPS cut is 5%. Moreover, ests iPhone 17’s GM is 1.7ppt below 16’s given 1) higher mix of the base model (36% vs 32%), and 2) lower GM of 17PM due to higher BOM costs; the firm said it sees more downside than upside.
• In Networking & Communications: shares of ANET, CSCO, declined after AOSL supports Nvidia’s 800 VDC data center architecture and POWI collaborates with Nvidia to advance 800 VDC Power Architecture for Next-Generation AI Data Centers.

• Taiwan said it doesn’t expect a significant impact from China’s new export controls on rare earth minerals, as it says it uses different rare earths in chip manufacturing.
• MKSI is considering selling a $1 billion specialty chemical division to focus on supplying chipmakers like TMS, the Financial Times reported this weekend. https://tinyurl.com/2x7dpxpj
• POWI shares jumped after unveiled new high-voltage GaN chips for 800V DC AI data centers, publishing details at the 2025 OCP Global Summit; said its 1250V PowiGaN switches hit over 98% efficiency, outperforming 650V GaN and 1200V SiC devices in power density and system simplicity; also said it is working with NVDA on megawatt-scale server rack power architecture to cut copper use.
• Bank America with a few semiconductor rating changes:
• ACLS was downgraded to Underperform from Neutral at Bank America
• GFS was downgraded to Underperform from Neutral at Bank America saying doesn’t see a specific catalyst for any immediate decline in the stock, but believes the company will need to display faster gross margin improvement and pricing power than what has been seen in the last two years,
• INTC was downgraded to Underperform from Neutral at Bank America with an unchanged price target of $34 saying the recent $80B jump in Intel’s market cap more than reflects its improved balance sheet and external foundry potential, while the competitive outlook remains challenged.
• TXN was downgraded to Underperform from Neutral at Bank America with a $190 price target as believes the turmoil caused by global tariffs could keep the lid on any near- to medium-term demand improvement in the industrial economy.
• In Semi-equipment: Bank America upgraded AMAT to Buy from Neutral (tgt to $250 from $180) citing the prospects for WFE outgrowth in calendar year 2026 for the first time in four years due to robust DRAM investments and upgraded CAMT to Buy from Neutral (tgt to $135 from $95) saying surging HBM inspection demand may reaccelerate sales growth,