Stocks, bonds, gold, and cryptocurrencies all moved higher today as markets navigated the weekend without any fresh shocks, no escalation in U.S.-China trade rhetoric, and tentative optimism about a possible end to the government shutdown (courtesy of comments from Kevin Hassett). For now, risk appetite has returned. That said, investors should keep in mind that the delayed September CPI release is due later this week — breaking the recent data lull — and roughly 15% of the S&P 500 is set to report earnings.
Mohamed El-Erian highlighted that today’s price action stands out, reinforcing the idea of a new "debasement"-style trading regime. As he noted, what’s remarkable is not just that gold reached another record high, but that it did so while U.S. equity indices climbed more than 1%. Historically, gold — a traditional safe haven — tends to rally when risk assets fall. Today’s simultaneous surge in both suggests a different set of drivers is at work. El-Erian expanded on these dynamics in a CNBC appearance earlier in the day.There was a brief interruption in the equity rally between 11:30 a.m. and 12:30 p.m. ET following a flurry of comments from former President Trump:• 11:45 ET: Trump says China could face 155% tariffs if no deal by Nov. 1 — stocks dip • 11:55 ET: Trump predicts a strong trade deal — stocks rebound • 12:15 ET: Suggests possible airplane export controls — stocks slip • 12:20 ET: Says he wants China to thrive — stocks rise again The volatility proved short-lived, with buyers stepping back in and pushing indices to fresh session highs. Small caps led the charge, gaining roughly 2%, followed by the Nasdaq.
The S&P 500 has now climbed more than 2% from Thursday’s lows, marking its strongest two-day rally since mid-June.
High-beta and speculative growth themes outperformed sharply, according to UBS Trading Desk data.
Speculative growth stocks ({UBXXSPEC}) surged.
Meanwhile, quality names ({UBPTQLTY}) — after rallying strongly late last week — saw profit-taking.
The key question now: will speculative growth retest last Wednesday’s highs, or has that peak already been set?Regional banks posted another solid session, recovering much of last week’s weakness.
Large-cap banks ({UBXXLCBK}) rose 2.1%, supported by strong earnings revision breadth and recent EPS beats. Consumer cyclicals ({UBXXCCYC}) also performed well, though retail ETF XRT continues to lag the broader market this year and remains a favored short.
Even if trade tensions ease, Aaron Nordvik argues that the K-shaped consumer dynamic is likely to persist.Apple surged more than 4%, hitting a new record high for the first time since December 2024 and once again approaching a $4 trillion market capitalization. Early data show the iPhone 17 outselling the iPhone 16 by 14% during their first 10 days on sale in the U.S. and China.
Source: BloombergApple’s strength helped the "Mag 7" outperform the remaining S&P 493, though momentum faded after the first hour of trading.
Source: BloombergThe Nasdaq has now retraced losses tied to Trump’s initial China-related tweet on the 10th.
Notably, while equities have recovered, volatility remains elevated compared to pre-tweet levels — though well below last week’s peaks.
Source: BloombergVolatility markets appear to be positioning for Friday’s CPI report and next week’s FOMC meeting.
Source: BloombergTreasuries were bid across the curve, though the 2-year underperformed, ending little changed. Longer-dated yields fell 2–3 basis points and failed to extend Friday’s bounce.
Source: BloombergThe 10-year yield slipped back below 4.00%.
Source: BloombergThe U.S. dollar strengthened modestly against other major currencies.
Source: BloombergGold saw heavy buying despite the firmer dollar, climbing back above $4,350.
Source: BloombergIt closed at yet another record high.
Source: BloombergSilver also advanced, though by a smaller margin.
Source: BloombergAs previously noted, the gold-to-silver ratio rebounded sharply from key support near 80x once again.
Source: BloombergBitcoin recovered from Friday’s sharp selloff, rising back above $111,000.
Source: BloombergEthereum lagged, slipping back into a downtrend versus Bitcoin after briefly topping $4,000 before reversing.
Source: BloombergIn contrast to the broader rally, crude oil finished lower on the day — though off its session lows — with WTI briefly dropping below $56.50, a five-month low.
Source: BloombergFinally, Bloomberg’s Michael Ball observes that last week’s volatility shock appears to have subsided, potentially paving the way for a year-end "Santa Claus" rally. The spike in the VIX to 29 and the 40% surge in VVIX barely dented the S&P 500 — a sign that investors were well hedged. Retail dip-buying offset systematic selling from volatility-control and CTA strategies, according to Nomura.
Systematic funds have since reduced exposure, while volatility sellers quickly moved in to capitalize on elevated premiums. The result has been a rapid return to the familiar positive-feedback loop: hedge unwinds, renewed short-vol positioning, and dip buying — all supporting spot prices and compressing implied volatility.Dealers have shifted back to positive gamma above 6,700 on the S&P 500, meaning hedging flows are now dampening, rather than amplifying, intraday swings. This environment favors the gradual, volatility-driven grind higher often seen from late October through year-end.With October VIX expiration approaching midweek, additional pressure may ease as long-vol positions roll off.Historically, October often delivers a volatility shakeout that clears excess leverage before setting the stage for a year-end rally once event risks subside.
While systematic strategies remain cautious for now, declining volatility and renewed upside momentum could eventually draw them back in. More importantly, discretionary managers trailing their benchmarks may feel increasing pressure to chase performance into year-end.