🔥Weekly Market Update: Welcome to the Best Month for Stocks
Wall Street is heading into November with serious momentum. The S&P 500 gained 2.63% in October, the Nasdaq surged 2.99%, and the Dow climbed 2.89%. Historically, November is the stock market’s favorite playground. Since 1927, the S&P 500 has gained about 59% of the time during this month, averaging a 1% return. And here’s the kicker: when October closes positive during a presidential year (like now), November tends to follow suit 92% of the time. Translation? Bullish tailwinds are blowing into the final sprint of 2025.
🌍 What’s Happening
The week was dominated by a few massive stories. First, the Federal Reserve cut rates by 25 basis points on October 29, bringing the federal funds rate to 3.75%-4.00% for the first time since earlier rate cuts began. Second, earnings season delivered some thunderous performances—Amazon crushed expectations with $180.2 billion in Q3 revenue, beating estimates and posting a stunning 38% profit increase. AWS grew a powerful 20%+ year-over-year, with revenue hitting $33 billion for the quarter, marking its highest growth in 11 quarters. The cloud division’s backlog hit $200 billion, signaling monster demand ahead.
But not all earnings were champagne moments. Meta Platforms took a sharp hit, plummeting approximately 9.5% to 13% after reporting a $15.93 billion one-time tax charge linked to Trump’s budget bill. Despite impressive revenue growth of 26% to $51.24 billion, the company raised its 2025 capex guidance and warned that AI investment will “accelerate significantly faster” next year—sending shivers through the market about spiraling costs.
Meanwhile, AMD continues its AI-fueled rocket ship, jumping approximately 60% in October alone—from around $160 to over $256 per share—after announcing blockbuster deals with OpenAI and Oracle. The chipmaker hit an all-time high, with Wall Street now throwing $300 price targets at it. These partnerships represent potential tens of billions in annual revenue, cementing AMD’s role as a serious competitor in AI infrastructure.
💡 Why It Matters
Rate cuts are a big deal for your portfolio. When the Fed lowers rates, bonds become less attractive and borrowing costs drop for companies and consumers. This historically pushes investors toward equities, especially growth and tech stocks that benefit from cheaper capital. That’s why the market rallied on the Fed’s move, despite the central bank keeping one eye on inflation still sitting at 3.0% year-over-year, above its 2% target.
The Amazon and AMD stories matter because they’re proof that AI spending isn’t just hype—it’s becoming real revenue. AWS backlogs hitting $200 billion means customers are serious about cloud adoption and AI infrastructure. AMD’s partnerships with OpenAI and Oracle prove that competition to Nvidia is intensifying, and the AI chip market is expanding faster than many expected.
Meta’s AI spending concerns are the flip side. If Big Tech’s capex acceleration outpaces revenue growth, margins could compress. This is the tension playing out right now: boundless enthusiasm for AI opportunities clashing with very real questions about whether returns will justify the gigantic spending.
🎯 Opportunity
Bank of America highlighted the sectors likely to lead in November: Consumer Discretionary (up 80% of the time, averaging 3.14% gains), Technology (up 71% of the time, averaging 3.1% gains), Healthcare (averaging 2.52% gains), Industrials (averaging 3.02% gains), and Small-Caps (up 70% of the time, averaging 2.64% gains). The playbook is clear: growth-oriented sectors with strong earnings visibility are where the momentum typically flows.
For individual investors, this week’s earnings calendar remains active. Major names continue reporting through early November, and watching how companies guide on capex, margins, and next-year growth will tell you whether this rally has legs or if we’re approaching a wall. Key data points to watch include employment reports and ongoing Fed commentary. A weak employment number could spook markets and feed recession fears, while a strong report might temper expectations for further Fed rate cuts.
Tech and AI beneficiaries remain intriguing—but at this point, valuations are stretched. Smart money is asking: Are you buying conviction in AI adoption, or expensive momentum?
📌 Bottom Line
November is historically the best month for stocks, and this year has major tailwinds: the Fed is cutting rates, earnings are beating, AI is accelerating, and seasonal momentum is in play. But be aware of the tension: enthusiasm for AI is racing ahead of proof points on profitability. Meta’s capex concerns and the need for real returns on AI investment are legitimate questions. The next few weeks will tell us whether this market has genuinely repriced for lower rates and strong tech earnings, or if we’re in a momentum bubble waiting to deflate. For now, the trend is your friend—but don’t catch a falling knife chasing today’s winners without checking the fundamentals.
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Disclaimer: This article constitutes the author’s personal views and is for entertainment and educational purposes only. It is not to be construed as financial advice in any form. Please do your own research and seek advice from a qualified financial advisor. From time to time, I have positions in all or some of the mentioned stocks when publishing this article. This is a disclosure - not a recommendation to buy or sell stocks.
The tension you identified between Meta's capex acceleration and actual returns crystallizes the entire AI investment thesis right now. When Meta raises 2025 guidance and warns spending will accelerate significantly faster while simultaneously taking a $15.93B tax charge, that creates a profitability squeeze that even 26% revenue growth can't fully justify at current multiples. The contrast with AWS hitting $200B backlog shows which companies are building infrastructure customers are paying for versus which ones are building it hoping customers will come. What's fascinating about the November setup is that seasonal tailwinds plus 92% positive presidential year correlation could paper over these fundamental tensions short term, but if Consumer Discretionary and Technology sectors both surge while Industrial capex for data center buildouts slows, that divergence would signal the market sees AI adoption decelerating before monetizaton catches up.