'Pure bullish optimism': US stocks extended their longest rally in four years

U.S. stocks ended October in the plus. Stock market indices at the end of the month showed the longest growth in the last four years, notes the Financial Times. Investor sentiment was influenced by the excitement around artificial intelligence, the Fed interest rate cut and Donald Trump's decision to ease trade pressure on China.

- In trading on October 31, the index of the technology sector Nasdaq Composite rose by 0.6% and closed near the mark of 23,725 points. The index was influenced by shares of Amazon, which rose after the report by 9.6%. Nasdaq was also supported by the growth of Netflix quotes by 2.7% after the announcement of a split in the proportion of 10 for 1 share. In total, the Nasdaq added more than 2% for the week.

- The S&P 500 index rose 0.3% to 6,840.2 points on Friday. Over the week, it added about 1%.

- The index of "blue chips" of the U.S. market Dow Jones Industrial Average on Friday almost unchanged, closing at 47,562.9 points (+0.1%). Over the week, the Dow added almost 1%.

- The Russel 2000 index of small-cap stocks rose 0.5% to 2,479.4 points. During the week it lost 2.2%.

- The price of gold fell slightly, reaching $4009.7 an ounce.

As a result, October, known for the biggest one-day crashes in stock market history, turned positive this year, CNBC writes: the S&P 500 index rose more than 2% for the month, marking the sixth straight month of gains, the Nasdaq added nearly 5%, the Russel 2000 rose 1.5%, and the DJIA gained more than 2%. The Dow has its sixth straight month of gains for the first time since 2018. The Nasdaq Composite had its seventh straight month in the plus side, and it's also the longest streak of gains since the start of 2018, the FT writes.

Amazon shares jumped nearly 10% after the company reported a 20% rise in revenue for its AWS cloud division in the third quarter - a result that beat Wall Street expectations. Amazon CEO Andy Jassy said AWS is "growing at a pace we haven't seen since 2022" and demand for AI and core infrastructure remains "strong." Thanks to Amazon's strong reporting, investors were actively buying other artificial intelligence-related stocks on Friday. Shares of military AI developer Palantir, which will report next week, rose more than 3%, while Oracle shares added about 2%.

Many investor fears about new duties were dispelled after U.S. President Donald Trump and Chinese President Xi Jinping reached a one-year truce following a meeting in South Korea, CNBC notes.

- "At the beginning of the week there were concerns about AI and its impact on the market, but they have now completely given way to pure bullish optimism," Jim Bianco, president of analyst firm Bianco Research, told the FT.

- "The adoption of AI is accelerating, and that makes investments in developing the computing power and functionality of the Gemini platform [from Google] worthwhile. This will be a key indicator going forward, especially as tech companies have already announced capital expenditures in excess of $600 billion for next year," Brian Mulberry, a client portfolio manager at Zacks Investment Management, told CNBC. - Investors will be watching closely to see how that spending translates into sales growth for each individual company's AI solutions."

- "There is a growing consensus that the impact of artificial intelligence will be real and transformative. The reporting season is shaping up well, we are at the start of a Fed rate cut cycle and there is optimism about a possible sensible trade deal between the US and China," Venu Krishna, head of US equity market strategy at Barclays, told the FT.

- Nationwide's Mark Hackett notes that the market is entering the strongest seasonally adjusted two-month period of the year, Bloomberg writes. Since 1950, the average increase for November and December is 3.3%

"We're in a seasonally strong fourth quarter, so we're using the drawdowns to buy," Thomas Lee of Fundstrat Global Advisors told Bloomberg. - "Many sectors are showing double-digit growth, so it's not just an AI story - it confirms that U.S. corporations and multinationals can deliver solid earnings growth.

This article was AI-translated and verified by a human editor