Hello, I'm Eric Criscuolo, Market Strategist at the New York Stock Exchange, and this is Market Storylines. Every week, we’re here to keep you up to date on the key trends and events driving global markets. As we record on Thursday afternoon, let’s dive into this week’s Market Storylines.

I hope everyone had a fun Halloween. In case you were wondering, my daughter was Winston the Squishmallow, my son was Toothless the dragon, my wife was Mary Poppins (the original) and I was Bert, the Chimney Sweep.

Last week’s big event, other than a thrilling World Series Game 7, was President Trump and Chinese President Xi finally having their face-to-face meeting. The two essentially agreed to a one-year truce and ratified the agreements that were negotiated in the earlier part of the week.

The Federal Reserve cut rates by 25bp and announced the wind down of its balance sheet run off but both were widely expected. Chair Powell delivered Hawks a Treat though when he said another rate cut in December was quote, “Not a foregone conclusion. Far from it.” End quote.

Interest rate sensitive and cyclical areas of the market were under pressure last week. While the S&P 500 gained almost 1%, the equal-weight version and small caps fell 1-2%, highlighting that those headline gains were only seen by a portion of the market- mostly large cap Tech.

Now this week, we said goodbye to Daylight savings as we moved our clocks back. As of today there are 37 trading days left in 2025, by my calculations, and Black Friday is 16 trading days away.

We not only said goodbye to October, we also said goodbye, at least temporarily, to Tech strength. AI deals and partnerships continue to spill out, but their expanding mass is starting to trigger more scrutiny than price upside, though admittedly that is still occurring. AI partnerships and investments will continue to come at a brisk pace, but if stock prices become desensitized that would be a problem for equities since the AI trade covers not only Tech but Energy, Utilities, and Industrials directly, and the other sectors tangentially. Sentiment could then erode further.

Since peeking at a record intraday high of 6920 right before Halloween, the S&P has pulled back and failed to regain the 6900 level. The fade picked up steam this week, and the index has now broken below its 20d moving average around 6750. The 50 day is a little further below, ominously around 6666. That would be a significant level for the S&P to test for support. It has not broken below it since early May.

It looked like equities were regrouping on Wednesday after the S&P held its 20d moving average and ended modestly higher, with small caps outperforming. The S&P closed off its highs, however, and Tech sold off into the close as more attention was focused on AI spend.

As we record this, the S&P is down over 1% this week. Tech and the mega caps are a significant source of weakness. The ICE semiconductor Index, FANG+ Index and Mega Cap Growth ETFs are down over 2% so far this week. Meanwhile, some of the less growthy and / or historically safer areas like Utilities and Real Estate are around unchanged. Cyclical areas like Energy and Financials are also holding up well due to specific drivers. For financials, it’s the insurance names providing the updraft on some solid earnings and reversion from earlier weakness. Meanwhile, natural gas plays are the source of strength for Energy. At the top of the leaderboard is Healthcare, another defensive-leaning sector. Managed care and healthcare services are leading there, along with some strength in the big pharma names.

Higher yields are causing at least some of the equity weakness, with rates up about 10bp across the curve. Several Fed officials have voiced their hesitation with lowering rates further at the next FOMC meeting. The growing balance of the Treasury TGA account due to the shutdown is also a headwind for equities as liquidity tightens for risk assets.

M&A was a theme for this week with an old-fashioned Merger Monday kicking things off. Several deals were announced, headlined by Kimberly Clark’s cash and stock deal for Kenvue for nearly $50 billion. Instead of a trade war we have a bidding war between Pfizer and Novo Nordisk for Metsera. Pfizer initially bid for the company, then Novo came over the top, Pfizer then matched, and then Novo called and raised. Charles Schwab is buying investment platform provider Forge. It was also reported that Softbank had approached chip maker Marvel earlier this year but the two sides couldn’t come to an agreement.

Commodities are mostly lower this week. Crude oil is down about 2% this week after inventory data showed larger builds, lingering supply concerns and reports that Saudi Arabia is lowering the price of its main oil grade to Asia. Natural gas is higher however.

While weakness is relatively modest in equities, crypto is getting smashed again this week. The October 10 crash continues to echo through the space. Bitcoin is down about 7% this week and Ether about 15%. Bitcoin failed to regain its 50 and 100 day moving averages last week and slid further as it crossed below its 200 day average while falling below 100 thousand. It’s struggling to hold that level currently. Ether is under even more pressure. A recent hack of the Ethereum Defi protocol Balancer has added to the pressure across the ecosystem.

Two big political events happened this week. Tuesday was Election Day, and Democrats performed very well. Don’t be surprised if you see a lot more focus on bringing down the cost of living, as that theme resonated in races across the nation. The other big event was Supreme Court oral arguments in the Trump tariff cases. The justices appeared pretty skeptical of the arguments put forth by the administration. Should the court strike down the tariffs, it would likely trigger significant volatility across asset classes.

Let’s close out with a look ahead. Once again, the economic data will be pretty sparse due to the government shutdown. There’s been some momentum behind the GOP eliminating the Senate filibuster rule in order to reopen the government. As the negative effects of the shutdown start to bite more into daily life, the pressure on elected officials to figure things out will get more intense. The Department of Transportation just announced 10% of flights at 40 major airports will be cut. This will not help with constituent sentiment.

Tomorrow, Friday, we’ll get the latest University of Michigan consumer sentiment survey. Fed speakers will continue to be scattered across the calendar. ADP will publish its new, weekly employment report on Tuesday. On Thursday, a 30 year Treasury auction will be a focus for bond markets. Earnings will continue to roll out, but with much less intensity. Cisco, Applied Materials and Coreweave will be among Tech names to report in what should be widely anticipated updates given the importance of the AI and tech narrative for equities. Circle will provide a look into the crypto space at a time when the industry is under pressure. Disney will also report, providing an important look at how consumer spending is holding up. A couple of healthcare investor conferences could drive some action in that sector. As far as international data, China’s Industrial Production and Retail sales will be a focus later in the week.

Perhaps the most important event next week will be Veterans Day on Monday. Equity markets will be open but the bond market will be closed, because they get to have all the fun. To all the Veterans out there, and especially my Dad, Thank You for your Service.

That’s wrap on this week. Remember you can watch Market Storylines on TV.NYSE.com or on the NYSE YouTube Channel. You can also listen every Friday on the Inside the ICE House Podcast feed. Thanks for joining me. I’m Eric Criscuolo. We’ll talk to you again next week.