To The Moon

U.S. stock markets kicked off the week on a positive note as investors shifted their focus away from political noise surrounding the Federal Reserve and toward the upcoming fourth-quarter earnings season, a potential catalyst that could extend the early 2026 market rally.

The Dow Jones Industrial Average and the $S&P 500(.SPX)$ both climbed 0.2%, reaching fresh record highs, while the Nasdaq Composite added 0.3%, led by technology and artificial intelligence-related stocks.

Markets

Earnings Season Takes Center Stage

Markets opened shakily following news of a criminal probe involving Fed Chair Jerome Powell, related to his Senate testimony on the renovation of the Fed’s Washington headquarters. However, sentiment quickly improved as investors looked ahead to corporate earnings.

With the U.S. economy continuing to show resilience, expectations for Q4 earnings growth remain strong. Corporate America delivered more than 8% revenue growth in Q3 2025, and strategists believe a similar performance in the fourth quarter could extend the streak of double-digit earnings (EPS) growth to four consecutive quarters.

Two key drivers are supporting this optimism:

• Artificial intelligence investment, which continues to accelerate and is expected to account for a significant share of earnings growth. $NVIDIA(NVDA)$ $Palantir Technologies Inc.(PLTR)$ $Oracle(ORCL)$

• A weaker U.S. dollar, down more than 5% year over year, boosting overseas revenues for U.S. multinationals.

Sector Performance: Financials Under Pressure

Not all stocks participated in Monday’s rally. Financial stocks lagged after President Donald Trump floated the idea of capping credit card interest rates at 10% for one year. While such a move would require congressional approval, the comments raised concerns about potential regulatory intervention.

As a result, banks and credit card issuers underperformed, while Consumer Staples emerged as the best-performing sector of the day.

Market Highlights

• Top gainer: $Western Digital(WDC)$ (+5.8%)

• Biggest decliner: $Synchrony Financial(SYF-B)$ (-8.4%)

• Best sector: Consumer Staples (+1.4%)

• Worst sector: Financials (-0.8%)

Federal Reserve Independence in Focus

Although markets largely brushed off the investigation into Powell, the situation has revived debate around the independence of the Federal Reserve. Several former Fed chairs, Treasury secretaries, and prominent economists have publicly defended Powell, warning that political pressure on the central bank could have lasting consequences.

For investors, the concern goes beyond short-term headlines. A perceived erosion of Fed independence could disrupt inflation expectations, influence long-term interest rates, and ultimately impact asset valuations.

Outlook: EPS Momentum Drives the Market

With record-high equity indexes, strong earnings expectations, and continued investment in transformative technologies like AI, U.S. stocks remain fundamentally supported. Despite political uncertainty, the message from the market is clear: as long as earnings growth remains intact, the bull case for 2026 stays alive…

[Salute]

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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.

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