Wall Street rallies to more records as gold's price slumps again
[October 28, 2025] By
STAN CHOE
NEW YORK (AP) — Stocks climbed to more records on Monday ahead of a week
packed with potentially market-moving events for Wall Street.
The S&P 500 rose 1.2%. The Dow Jones Industrial Average added 337
points, or 0.7%, and the Nasdaq composite jumped 1.9%. Each of the trio
set an all-time high for a second straight day.
Stocks also rallied in Asia ahead of a meeting on Thursday between the
heads of the United States and China. The hope is that the talks could
clear rising tensions between the world’s two largest economies and
allow the global economy to keep motoring.
U.S. Treasury Secretary Scott Bessent said there’s “a framework” for
U.S. President Donald Trump and Chinese leader Xi Jinping to discuss at
their meeting, while Trump said, “We feel good” about working things out
with China.
That’s just one of many things that will need to go right this week in
order for the U.S. stock market’s tremendous, record-breaking rally to
continue. The S&P 500 has shot up a stunning 38% since hitting a low in
April, when worries about Trump’s tariffs on China and other countries
were at their peak. Besides hopes for easing trade tensions, the rally
has also been built on expectations for several more things to happen.
One is that the Federal Reserve will keep cutting interest rates in
order to give the slowing job market a boost. The Fed’s next
announcement on interest rates is due on Wednesday, and the nearly
unanimous expectation among traders is that it will cut the federal
funds rate by a quarter of a percentage point at a second straight
meeting.
It’s not a certainty though, because the Fed has also warned it may have
to change course if inflation accelerates beyond its still-high level.
That’s because low interest rates can make inflation worse.
The latest monthly report on inflation came in slightly better than
economists expected, raising hopes, but it may be the final update for a
while if the U.S. government’s shutdown continues. That could cloud the
forecast for cuts to rates to continue.
Besides lower interest rates, another expectation that’s propped up
stock prices is the forecast that U.S. companies will continue to
deliver solid growth in profits.
Keurig Dr Pepper climbed 7.6% Monday after reporting profit for the
latest quarter that matched analysts’ expectations. The company behind
Canada Dry and Green Mountain coffee said it benefited from higher
prices for K-Cup products, among other things
Some of Wall Street’s most influential stocks are set to report their
results this week, including Alphabet, Meta Platforms and Microsoft on
Wednesday, and Amazon and Apple on Thursday. They’ll need to deliver big
growth and justify big spending underway in artificial-intelligence
technology.
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Options trader Brian Garvey, left, works on the floor of the New
York Stock Exchange, Monday, Oct. 20, 2025. (AP Photo/Richard Drew)
 Worries have been climbing that AI
may be in the midst of a bubble, similar to the dot-com bonanza that
ended up bursting in 2000. Nvidia’s stock is up 42.6% for the year
so far, for example, and Qualcomm soared 11.1% Monday after
unveiling AI products for data centers.
Announcements of mergers and buyouts also helped
move stocks on Monday. Cadence Bank rose 4.4% after Huntington
Bancshares said it would buy the bank with locations across Texas
and the South for $7.4 billion in stock. Huntington fell 2.7%.
Avidity Biosciences leaped 42.4% after Novartis agreed to buy the
biopharmaceutical company based in San Diego for $12 billion, after
Avidity spins off its early-stage precision cardiology programs.
All told, the S&P 500 rose 83.47 points to 6,875.16. The Dow Jones
Industrial Average added 337.47 to 47,544.59, and the Nasdaq
composite climbed 432.59 to 23,637.46.
In stock markets abroad, indexes rose modestly in Europe following
bigger gains in Asia.
Stocks climbed 1.2% in Shanghai and 1% in Hong Kong. They rose even
more in Tokyo, where the Nikkei 225 jumped 2.5%, and in Seoul, where
South Korea’s Kospi rallied 2.6%.
The Nikkei 225 topped the 50,000 level for the first time as opinion
polls show Japan’s newly installed Prime Minister Sanae Takaichi
enjoying high levels of public support for her market-friendly
policies. Takaichi favors raising spending on defense, which has
boosted prices of stocks in major defense contractors, such as
Kawasaki Heavy Industries, which jumped 9% Monday.
In the bond market, the yield on the 10-year Treasury eased to 3.99%
from 4.02% late Friday.
All the optimism flowing through financial markets helped knock down
the price of gold. The metal’s price has stalled after it nearly
touched $4,400 per ounce last week, when it set its latest record.
It briefly dropped below $4,000 Monday, but it’s still up more than
50% for the year so far.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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