Nasdaq’s Wild Week: AI Mega-Deal Hype, Tariff Turmoil, and Tech Titans on Edge

Key Facts:

Stocks Snap Win Streak: The Nasdaq Composite jumped ~0.4% Friday to 22,484 ^[1], trimming weekly losses to ~0.6%. The Nasdaq-100 likewise rebounded ~0.4% to 24,504, but both indices snapped a 3-week winning streak amid late-week volatility ^[2] ^[3]. All major indexes remain near record highs hit early in the week ^[4].
Inflation & Fed Easing: Fresh data showed core inflation (PCE) rose 2.7% year-on-year in August – right on forecast ^[5] – easing fears of a surprise spike. This reinforced hopes the Fed will continue cutting rates after delivering its first 2025 rate cut last week ^[6]. Benchmark 10-year Treasury yields hovered around 4.2% ^[7], while a weakening dollar (index at 98.1, a 3-year low) lent support to U.S. stocks ^[8].
Trump’s Tariff Jolt: President Donald Trump unveiled new import tariffs (effective Oct. 1) on heavy trucks, pharmaceuticals, furniture and more ^[9] ^[10]. The announcement sent domestic manufacturers surging – truck-maker Paccar leapt 5.2% ^[11] – and lifted big pharma stocks (Eli Lilly +1.4%, Pfizer +0.7% ^[12]). However, high-end furniture retailers swung wildly: RH sank ~4% on the tariff news ^[13]. Analysts noted the tariff details were scant, causing “ripples” rather than shockwaves in markets ^[14].
Big Tech in Focus:Apple, Microsoft, Alphabet, and Meta stocks held near historic highs despite the market dip. Apple’s shares hovered around $255 (just shy of record levels) after its latest iPhone launch, which saw the company eating tariff costs to keep prices steady ^[15] ^[16]. Microsoft drew political attention – Trump publicly demanded the firing of its new policy chief (and former U.S. official) Lisa Monaco ^[17] – but the company’s stock barely budged amid the drama. Amazon agreed to pay a record $2.5 billion to settle an FTC probe over “deceptive” Prime sign-ups ^[18], though the fine amounts to just 33 hours of Amazon’s sales and its stock was largely unmoved by the news ^[19].
AI & Chip Boom: The AI frenzy surged anew. Nvidia – now the world’s most valuable chipmaker – hinted at a massive $100 billion investment in OpenAI, spurring a $12 billion flood of inflows into U.S. equity funds as investors cheered the AI push ^[20]. Semiconductor stocks rallied: Intel rocketed ~20% this week, extending a four-day surge after reports that Apple might take a strategic stake in the company ^[21]. Nvidia itself announced a $5 billion collaboration with Intel to boost chip production ^[22]. Memory maker Micron beat earnings forecasts with a 46% jump in quarterly revenue, crediting red-hot AI server demand ^[23].
EVs & Autonomy: In the electric vehicle arena, Tesla got a bullish boost. Wedbush’s Dan Ives hiked his Tesla stock target to a Street-high $600, predicting an accelerated rollout of Tesla’s robotaxi network and calling investors “underestimating” the company’s AI-driven transformation ^[24]. Ives even posits Tesla could hit a $2–3 trillion market cap by 2026 in a bull case – especially with the Trump administration eager to fast-track U.S. autonomous tech to win the “AI arms race” against China ^[25] ^[26].
Earnings and Outlook: Retail giant Costco reported strong profits but signaled slightly softer U.S. same-store sales and slowing membership renewal rates, sending its stock down 2.9% ^[27] ^[28]. Costco noted consumers are cautious on discretionary spending and face more retail options vying for their dollars ^[29]. Looking ahead, third-quarter earnings season kicks off mid-October ^[30]; fund managers say recent market moves resemble typical “quarter-end window dressing” and warn of choppiness ahead as investors brace for earnings reports ^[31]. A potential U.S. government shutdown next week is another wildcard, threatening to delay economic data releases and inject uncertainty into markets ^[32].
Forecasts Split Bull vs. Bear: Despite this week’s dip, the Nasdaq is still up ~16% in 2025 ^[33], and some strategists see more upside. BMO Capital hiked its S&P 500 year-end target to 7,000, arguing that Fed easing, solid earnings, and a not-yet-overheated AI boom have created a “Goldilocks” backdrop for stocks ^[34]. “AI [is] not anywhere near bubble territory”, BMO’s Brian Belski wrote, comparing the current momentum to the mid-1990s market boom ^[35]. But others urge caution: New tariffs could lift inflation into year-end (CPI is forecast ~3% by Q4) ^[36], which might pressure the Fed to slow or pause rate cuts. With valuations stretched, even Fed officials admit uncertainty – one noted “very low confidence” in inflation forecasts amid the trade turbulence ^[37]. In short, Wall Street enters the final quarter of 2025 walking a tightrope between AI-fueled optimism and macroeconomic risks.

Nasdaq Composite and Nasdaq-100 Snap Winning Streak

After charging to all-time highs on Monday, U.S. tech stocks hit some turbulence to end the week. The Nasdaq Composite Index gained +0.44% on Friday (about +99 points) to close around 22,484 ^[38], helped by a relief rally on in-line inflation data. That advance broke a three-day losing streak for stocks ^[39]. Even so, the Nasdaq Composite fell ~0.7% for the week, while the S&P 500 (-0.3%) and Dow (-0.1%) also logged modest weekly declines ^[40] ^[41]. This marked the end of a three-week run of gains for the Nasdaq and S&P ^[42]. The Nasdaq-100 index of top-tier tech shares showed a similar pattern – rebounding Friday but finishing slightly lower week-over-week.

All three major U.S. indices remain near record highs, having touched fresh peaks at the start of the week ^[43]. In fact, the Nasdaq is on track for its sixth straight monthly gain, and is up over 16% year-to-date ^[44] – a testament to 2025’s powerful tech-led rally. The late-week pullback came amid typical end-of-quarter repositioning. “To me, it’s typical of quarter-end window dressing,” noted one wealth manager, who cautioned that volatility could linger into the coming weeks as investors rebalance and gear up for earnings season ^[45].

Inflation data helped spark Friday’s bounce. The Commerce Department’s latest PCE inflation report – the Fed’s preferred gauge – showed core prices rose a moderate 0.3% in August (2.7% year-on-year), exactly matching economist expectations ^[46]. Personal incomes and consumer spending actually surprised to the upside, signaling resilient demand ^[47]. The inflation news “offered hope the Federal Reserve could continue cutting interest rates” in the coming months ^[48]. It arrives on the heels of the Fed’s first rate cut of 2025, delivered last week, which ended a months-long pause in easing ^[49]. Fed policymakers have hinted more cuts are likely on the way ^[50], though they remain noncommittal given inflation is still above the 2% goal ^[51].

Treasury bond yields initially rose on the data but remained contained. The 10-year Treasury yield ticked up to ~4.19% by Friday’s close ^[52] – high by recent standards but well below cycle peaks – and real yields (inflation-adjusted) are off their highs. The U.S. dollar continued to soften, with the dollar index slipping to 98.15, its lowest level since early 2022 ^[53]. A weaker dollar often buoys tech multinationals by making exports more competitive. Meanwhile, crude oil prices climbed slightly (WTI around $65/barrel) and gold rallied to ~$3,795/oz, suggesting some investors sought hedges amid the mid-week stock selloff ^[54]. Even bitcoin held steady near $109,000 ^[55], showing risk appetite has not evaporated.

Market internals underscored the bounce: on Friday, advancing stocks far outnumbered decliners by ~1.7-to-1 on the Nasdaq ^[56]. Still, trading volumes were a bit below average, as is common late in the quarter ^[57]. Traders are now looking ahead to a slew of major events in early October. The September U.S. jobs report (due next Friday) is a critical data point that could sway the Fed’s next move ^[58]. Perhaps more urgently, a potential federal government shutdown looms on October 1 if budget agreements aren’t reached. A shutdown would temporarily halt various economic reports and could dampen investor sentiment ^[59]. Washington observers note that Congress is down to the wire on funding, injecting an extra dose of uncertainty into markets. Any protracted shutdown might even curb the U.S. Securities and Exchange Commission’s operations, though the SEC has signaled its staff not to worry about imminent furloughs ^[60] ^[61]. In short, after an exceptional run to record highs, the Nasdaq now enters a more challenging macro gauntlet – but so far, optimism around tech and easing inflation is helping counterbalance the risks.

Tech Titans Steady as Markets Weigh News from Apple, Microsoft, Google & Meta

The Nasdaq’s largest constituents – the mega-cap tech companies that collectively drive a huge share of index performance – showed relative resilience through the week’s ups and downs. Many of these giants had hit all-time highs earlier in September, so investors were closely watching how they’d react to the latest news.

Apple (AAPL) shares were little changed on the week, hovering around the mid-$250s. At ~$255, Apple sits just a few dollars shy of its record price ^[62], buoyed by a year of strong gains. The company held its annual product launch event mid-month, unveiling the iPhone 17 lineup and new wearable gadgets. Notably, Apple chose not to raise iPhone prices despite rising costs – even absorbing over $1 billion in tariffs this quarter – to remain competitive ^[63]. That decision, alongside better-than-feared iPhone early sales (and a new ultra-slim “iPhone Air” model), has reassured investors. Some market strategists are even calling Apple the “Treasury bill of tech stocks” – a perceived safe haven – given its massive cash flows and loyal customer base. Indeed, as one analyst quipped, Apple has become a defensive stalwart in portfolios, even if it’s no longer a fast-growth darling. With the holiday quarter approaching, Apple’s performance will be an important bellwether for consumer tech spending, but for now its stock remains a pillar of stability in the Nasdaq.

Microsoft (MSFT) also traded in a tight range this week, closing around the mid-$330s per share. The software titan faced an unusual headline Friday when President Trump singled out a Microsoft executive on social media. Trump publicly demanded that Microsoft fire its President of Global Affairs, Lisa Monaco – a former Obama and Biden administration official – calling her “a menace” to national security ^[64] ^[65]. Monaco, who joined Microsoft in July to manage government relations, previously played a key role in the Justice Department’s response to the Jan. 6, 2021 Capitol attacks. Trump’s call to oust her appears to be part of his broader effort at “exacting retribution” on figures he perceives as political enemies ^[66]. The unprecedented spectacle of a sitting president pressuring a private company about personnel raised eyebrows in Washington and Silicon Valley. However, Wall Street largely shrugged it off – Microsoft’s stock barely flinched on the news. Analysts noted that Microsoft’s fundamental outlook (bolstered by booming cloud and AI services) far outweighs any short-term political noise. Still, the episode underscores how Big Tech is increasingly in the political crosshairs, whether over content, competition, or in this case, personnel. Microsoft, for its part, declined comment on Trump’s remarks. The company is fresh off completing its $69 billion Activision-Blizzard acquisition (in a year when antitrust scrutiny is otherwise high), and its focus remains on AI integration across its product suite (from Azure to Office). Investors will watch if Trump’s stance foreshadows any policy moves affecting Microsoft or its peers, but so far it appears to be a war of words with minimal market impact.

Alphabet (GOOGL) and Meta Platforms (META) – the internet ad giants – saw only modest stock movement during the week. Both companies’ shares are trading near multi-year highs after significant rebounds in 2023-2025. Alphabet’s Google division is, however, in the midst of a landmark antitrust trial with the Department of Justice (alleging it abused its search monopoly). That trial began earlier in September and is expected to last into 2024, potentially yielding insights that could influence Google’s business practices. Thus far, no bombshell revelations from the courtroom have emerged to move the stock markedly. Google did face a brief outage of its search and YouTube services this week (prompting trending hashtags on social media), but the disruption was quickly resolved. On the positive side, Google is benefiting from a recovery in digital ad spending and its early bets on AI – for instance, the company this week expanded access to its Bard AI chatbot and announced new AI features in its cloud services. All told, Alphabet shares ended the week roughly flat, reflecting a balance of strong cash flows against those longer-term legal uncertainties.

Meta had its own showcase recently: the Meta Connect 2025 conference, where CEO Mark Zuckerberg unveiled the company’s latest virtual reality and AI initiatives. Meta introduced the “Ray-Ban Meta” smart glasses with built-in displays (launching at $799) and previewed its next-generation VR headset. The company also emphasized new generative AI features for Facebook, Instagram, and its Quest devices, positioning itself at the intersection of social media and the metaverse. Investors have been cautiously optimistic – Meta’s relentless focus on the metaverse in 2022-2023 drew skepticism, but its pivot to also prioritize AI (and a return to advertising revenue growth after Apple’s privacy changes) has improved sentiment. Meta’s stock is up dramatically year-to-date, and this week it traded roughly sideways, hanging around the mid-$300s. Some analysts note that Meta’s valuation looks more reasonable after the past year’s earnings rebound, though the company still faces challenges from TikTok competition and regulatory pressures (for example, the EU’s Digital Services Act compliance). For now, however, Meta’s cost-cutting (“year of efficiency”) and renewed product excitement (AI and AR glasses) have restored a measure of investor confidence. The stock’s stabilization this week suggests traders are in wait-and-see mode until Meta reports its Q3 user engagement and ad revenue figures later in October.

One area of note: Amazon (AMZN), which straddles both tech and consumer sectors, made headlines with a record-breaking settlement. On Thursday, Amazon agreed to pay $2.5 billion to resolve an FTC lawsuit accusing it of duping millions of users into unwanted Prime subscriptions and making it arduous to cancel (“dark patterns”). The settlement includes $1.5 billion in refunds to customers – tens of millions of Prime users may get about $51 each – and a $1 billion penalty to the FTC ^[67] ^[68]. It’s the largest-ever consumer refund in an FTC case and a big win for regulators’ crackdown on Big Tech practices. Yet for Amazon, which generates $2.5 billion in sales roughly every 33 hours, the financial hit is a blip ^[69]. The company did not admit wrongdoing and said it had already made changes to simplify Prime cancellations. Tellingly, Amazon’s stock barely reacted to the news ^[70], slipping about 1% on Thursday and rebounding ~0.8% Friday ^[71]. Investors seem relieved the costly case is closed and view the fine as the “cost of doing business” for a company of Amazon’s scale. Nonetheless, the episode is a reminder of the regulatory risks swirling around tech giants – Amazon also faces a major antitrust suit filed by the FTC earlier this week (separate from the Prime matter), and both Google and Meta have antitrust battles of their own. For now, none of these issues have derailed Big Tech stocks, but they add an overhang that investors are monitoring closely.

AI & Semiconductor Surge: Nvidia’s $100B Bombshell, Intel’s Rally, and Chip Earnings

The artificial intelligence (AI) boom – a key driver of Nasdaq’s gains this year – kicked into an even higher gear this week, especially in the semiconductor arena. The sector delivered a mix of stunning announcements, deal rumors, and strong earnings that kept AI at the center of market attention.

Leading the charge was Nvidia (NVDA), whose stock and strategic moves often set the tone for the AI industry. Nvidia’s CEO Jensen Huang made waves with news that the company is in discussions to invest a staggering $100 billion in OpenAI ^[72], the firm behind ChatGPT. This potential mega-investment (reportedly in partnership with other backers) would dramatically deepen Nvidia’s ties to OpenAI and solidify its role at the heart of the AI revolution. The mere report of such a colossal deal electrified investors. In fact, U.S. equity funds saw over $12 billion of net inflows in the week through Sept. 24 – snapping a two-week streak of outflows – and analysts attributed it partly to “improved risk sentiment” after Nvidia’s bold OpenAI plans became public ^[73] ^[74]. It’s a testament to how Nvidia has become a bellwether: any hint that it will further capitalize on AI’s growth (in this case by potentially funding one of AI’s biggest players) is taken as a bullish signal for the whole market. Nvidia’s stock rose modestly on the news (adding to what’s already a more than three-fold increase in 2023). At a market cap around $1.2 trillion, Nvidia is currently the world’s most valuable chipmaker, and this week’s developments underscore that it’s not resting on its laurels.

Another blockbuster storyline involved Intel (INTC) – a company often seen as an underdog trying to regain its former chip dominance. Intel’s shares exploded upward this week, posting their fourth straight daily gain on Friday and rising over 20% since Monday’s close ^[75]. What’s behind this sudden surge? Investors latched onto multiple promising signals for Intel’s turnaround. First came a report (from The Wall Street Journal) that Intel had held talks with Apple about the possibility of Apple investing in Intel ^[76]. Such a stake would be highly unorthodox – Apple typically isn’t in the business of buying into third-party chip suppliers – but it raised speculation about a deepened partnership. Apple is increasingly designing its own silicon (for iPhones and Macs) and manufacturing through foundries like TSMC; an alliance or stake could indicate Apple might leverage Intel’s fabs in the U.S. for some production or co-development. While the details are unclear, the mere idea of involvement from Apple ignited hopes that Intel’s costly manufacturing expansion could get a vote of confidence (and perhaps funding) from the world’s largest company.

On top of that, Nvidia and Intel announced a collaboration last week: a $5 billion investment and partnership for Intel to produce chips for Nvidia ^[77]. This was confirmed by both companies and is part of Nvidia’s strategy to diversify its manufacturing (reducing reliance on Taiwan’s TSMC) while Intel opens its foundry doors to external customers. The deal is a significant validation of Intel’s foundry business – essentially Nvidia saying Intel’s factories will be up to the task of cranking out advanced GPUs in coming years. Intel’s stock jumped 9% on Thursday alone on that news ^[78], then kept climbing Friday (+4.4%) ^[79]. By week’s end, Intel was one of the Nasdaq’s top performers, a remarkable reversal for a stock that had lagged for much of the year. Some traders who had bet against Intel got caught off guard by the speedy rally, leading to short-covering that amplified the gains. The broader takeaway: semiconductor stocks remain extremely sensitive to AI-related newsflow, and even former laggards can roar back if they show they’re part of the new AI supply chain.

Elsewhere in chips, Advanced Micro Devices (AMD) moved more quietly but still benefited from the positive sentiment around AI. AMD’s upcoming MI300 accelerator chips (aimed at challenging Nvidia’s GPUs) have reportedly seen strong interest from cloud companies – any update on their launch or early orders could be a catalyst for AMD. No major headlines broke for AMD this week, so its stock traded roughly flat to slightly up, following the general Nasdaq trend. TSMC (TSM), the Taiwanese foundry giant (not Nasdaq-listed but closely watched in tech), had an investor symposium where it reiterated plans to start 2nm chip production in 2025, keeping Moore’s Law advancement on track. Meanwhile, the Philadelphia Semiconductor Index (SOX), which tracks a broad basket of chip stocks, rose about 1% on Friday and outperformed for the week, thanks largely to the aforementioned Intel surge.

On the earnings front, one notable report came from Micron Technology (MU), the memory chip maker. Micron’s fiscal Q4 results (announced late on Sept. 25) beat Wall Street expectations on both revenue and profit ^[80] ^[81], providing another sign that the dreaded chip downturn of 2022-2023 has given way to recovery. Micron’s sales jumped 46% year-over-year to $11.3 billion, with EPS of $3.03 crushing estimates ^[82]. The company noted record revenue from data-center customers, thanks in large part to booming demand for AI servers (which use gobs of Micron’s high-bandwidth memory and DRAM chips). This aligns with what Nvidia and others have indicated – AI infrastructure build-out is a key tailwind lifting (nearly) all boats in the semiconductor sea. Micron’s CEO also issued an upbeat outlook, suggesting memory chip pricing has stabilized and customer inventories are back to healthy levels after a prolonged glut. One caveat: Micron is facing potential headwinds in China (which has restricted some Micron product sales citing “security risks,” seen as retaliation for U.S. export controls). But so far, strong AI-led demand elsewhere is offsetting that. Micron’s stock initially popped on the earnings beat, though it gave back some gains later in the week amid the general market pullback. Still, Micron’s report adds evidence that the chip cycle has turned up – a positive sign for Nasdaq’s large semiconductor cohort.

Stepping back, the AI theme continues to dominate the narrative in tech. Beyond chips, Big Tech firms are racing to showcase AI advancements in their products: this week alone, Meta rolled out AI chat “personas” for Instagram, Microsoft launched new AI Copilot features for Windows 11, and Google integrated its Bard AI into more services. Investors are trying to discern winners from hype, but as the fund flow data suggests, many see this as a secular trend with legs. Importantly, some veteran analysts caution that even if AI demand is real, stock valuations have baked in a lot of optimism. We’re now entering a phase where results must start justifying the hype – e.g., will all these AI investments translate into significant new revenue streams? For the moment, though, companies tied to the “picks and shovels” of AI – especially chipmakers – are reaping the rewards of investor enthusiasm. As one market commentator put it, “In 2025, Silicon is the new oil,” underscoring how critical semiconductors have become to the modern economy and to stock market leadership.

Tariffs, Trade and Geopolitics: New Import Levies Hit Trucks, Drugs, Furniture

Geopolitics made its presence felt on Nasdaq this week, chiefly through the lens of trade policy. Late Thursday, President Trump announced a surprise new round of tariffs on a variety of imported goods – a move that immediately sent ripples through several sectors of the stock market ^[83] ^[84].

The tariffs (set to take effect October 1) target imports of heavy-duty trucks, branded pharmaceutical products, certain furniture categories (like kitchen cabinets, bathroom vanities, upholstered seats) and other items. The rationale given by the administration is to protect U.S. industries from what Trump calls unfair foreign competition and to shore up American supply chains under the banner of national security ^[85]. This echoes themes from Trump’s first term trade wars, though the scope now is somewhat narrower and more focused on specific sectors.

Investors initially reacted by punishing import-reliant companies and rewarding domestic-focused ones. On Friday, shares of Paccar (PCAR) – an American truck manufacturer (maker of Peterbilt and Kenworth rigs) – shot up 5.2% ^[86] ^[87]. Paccar builds most of its trucks in the U.S., so tariffs on foreign-made trucks make its homegrown products relatively more competitive. The company had previously cited tariff uncertainties as a headwind for the truck market, but this new policy clearly tilts in its favor ^[88]. Similarly, Oshkosh Corp and other U.S.-centric heavy vehicle makers saw stock bumps. On the flip side, Volvo AB and other foreign truck importers face a 25% duty hurdle for selling into the U.S., which could dent their sales.

The tariff list also included pharmaceutical imports – particularly branded drugs from overseas. It’s unusual to see tariffs on pharmaceuticals, and analysts are still parsing the implications. Major U.S. drugmakers like Eli Lilly (LLY) and Pfizer (PFE) actually rose on the news (Lilly +1.4%, Pfizer +0.7% by Friday’s close) ^[89], as investors bet these firms might gain domestic market share if competing drugs from Europe or elsewhere become pricier. Many big pharma companies manufacture in multiple countries, so the impact will vary by product. Notably, European pharma stocks (e.g., Sanofi, Novo Nordisk) barely flinched – EU officials indicated they would seek more details and potentially contest the tariffs as unjustified ^[90] ^[91]. A Reuters “Macro Matters” analysis suggested these pharma and medtech tariffs “add to noise” but are unlikely to seriously disrupt trade or cause medicine shortages in the near term ^[92]. They could, however, raise costs for U.S. hospitals and patients on certain imported treatments, unless those drugs shift production to the States.

The home furnishings sector saw perhaps the most volatility. Many upscale furniture retailers rely on imported luxury goods. Shares of RH (formerly Restoration Hardware) plunged over 4% intraday Friday and ended down 4.2% ^[93]. Williams-Sonoma (owner of West Elm and Pottery Barn) initially dropped 2–3% but then seesawed to a flat close ^[94]. The tariffs on cabinets, vanities, and furniture could pinch these firms if they source those items from abroad (e.g., a lot of wooden furniture is made in China, Vietnam, etc.). However, there’s also a chance they pass costs onto consumers. The market’s whipsaw action in these stocks reflected uncertainty: as one trader noted, details were “sparse” and it wasn’t immediately clear how much of each retailer’s inventory would be tariffed or if exemptions might apply ^[95] ^[96]. In the end, the furniture tariffs didn’t create carnage, but they introduced new risk for an industry already navigating an economic slowdown in home spending.

From a broader view, Trump’s tariff moves serve as a reminder that trade tensions remain a wildcard for markets. Unlike a few years ago, when U.S.–China tariff battles dominated headlines, this action is more multi-pronged – also hitting allies (European drug exporters, for instance). The White House framed it as protecting American jobs and countering a “large scale flooding” of imports that undercut U.S. manufacturers ^[97]. Critics argue such tariffs could fuel inflation (by raising consumer prices) just as the Fed works to contain it. Indeed, economists estimate that if these tariffs persist, inflation could re-accelerate in Q4; one professional survey now sees U.S. CPI ending the year around 3% y/y, partly due to companies passing on tariff costs to consumers ^[98].

Notably, the tariffs arrive amid President Trump’s re-election campaign messaging that emphasizes economic nationalism. They also coincided with him pressuring U.S. companies on other fronts – from the Microsoft ordeal to pushing TikTok’s U.S. operations into American hands (Trump signed an executive order Thursday regarding a forced sale of TikTok, valuing it at $14 billion ^[99] ^[100], in which Oracle’s Larry Ellison is rumored to be involved). Taken together, it appears the administration is doubling down on a “America First” tech and industrial policy. This includes wanting the U.S. to dominate in critical technologies like AI and autonomous vehicles – a fact noted by analysts who say Trump’s pro-tech stance (at least for U.S.-based firms) could benefit companies like Tesla and others developing next-gen tech domestically ^[101].

For investors in Nasdaq companies, the immediate effects of this week’s trade moves were mixed but not drastic. Market reaction was relatively muted beyond the specific stock movers mentioned. As an investment strategist commented, the tariff news created some ripples, not tidal waves ^[102]. The real impact will be seen over time: Will companies reroute supply chains? Will foreign partners retaliate? If inflation does blip higher due to tariffs, could that alter the Fed’s trajectory? These are the questions the market will be weighing in coming weeks. For now, the Nasdaq’s main engines – big tech and semiconductor firms – are not directly in the crosshairs of these particular tariffs (most high-end tech products were spared new levies, unlike in past U.S.-China rounds). But as history has shown, trade policy can evolve quickly, and geopolitics remains an ever-present backdrop for Nasdaq’s globally-connected businesses.

Earnings Roundup: Costco, FedEx, and Signals on the Consumer

While tech excitement often steals the spotlight, the Nasdaq is also home to companies that provide a window into the broader consumer and business spending environment. Late September brought a few notable earnings reports and corporate updates that, taken together, sketch a mixed picture of the economy’s strength.

One closely watched report was from Costco Wholesale (COST), the membership-based retail powerhouse (and a Nasdaq-listed company). Costco reported fiscal fourth-quarter results on Thursday evening. On the surface, the numbers looked solid: revenue rose 9% to $78.9 billion and earnings per share beat analyst estimates. Shoppers have been flocking to Costco for its bulk bargains, especially with inflation still pinching wallets. However, investors honed in on some slightly soft metrics in the details. U.S. same-store sales (excluding fuel) were up just ~1.1%, a tad below forecasts – indicating a modest slowdown in growth at established warehouses ^[103]. More notably, Costco revealed that its membership renewal rate ticked down by a few basis points. Given that 90%+ of members typically renew, any slip caused concern about possible saturation or competition. Executives attributed it in part to fewer people upgrading to the higher-tier membership.

Costco’s commentary also struck a cautious tone. The company said consumers are pulling back on discretionary purchases – things like electronics, jewelry, and home goods – even as they continue to spend on essentials (food, household staples) where Costco’s value proposition is strong ^[104]. They also mentioned intensifying rivalry from other retailers vying for budget-conscious shoppers’ business ^[105]. In Costco’s words, shoppers remain value-focused and “cautious,” especially on big-ticket items. This admission pressured retail stocks broadly on Friday. Costco’s own stock fell ~2.9% despite the earnings beat ^[106], as the market digested the mixed signals. Other retail names like Walmart and Target (not Nasdaq-listed) showed little reaction, but any sign of consumer slowdown is something investors keep a keen eye on. Overall, Costco’s results suggest the consumer is still spending but choosier, hunting for deals and prioritizing necessities – not a bad scenario, but a notch down from the stimulus-fueled splurges of prior years.

In the transport sector, FedEx (FDX) (listed on NYSE, but as a global economic bellwether its report is worth noting) delivered an upside surprise this week that has implications for Nasdaq’s many e-commerce and industrial names. FedEx beat earnings forecasts and lifted its full-year outlook, citing improved cost management and an uptick in shipping volumes. The company’s CEO said U.S. package demand is stabilizing after a weak patch, and that its aggressive drive to cut expenses (including parking planes and trimming labor hours) has paid off. Why does this matter for Nasdaq? Because a healthier FedEx suggests supply chains are normalizing and consumer demand (especially online shopping) is holding up. It bodes well for e-commerce players like Amazon, eBay, and Etsy, as well as semiconductor firms supplying logistics tech. FedEx’s optimistic tone on the economy – they foresee a “moderate recession” at worst – helped lift market sentiment mid-week, counterbalancing some of the tariff concerns.

Another slice of the market: Biotech and healthcare stocks. There wasn’t a flood of earnings in this group, but a notable trend emerged tied to government policy. The Trump administration set a Sept. 30 deadline for pharmaceutical companies to cut drug prices on certain medications (a follow-up to its efforts to curb costs). In response, several big drugmakers announced price reductions this week to comply or at least signal cooperation. For example, Bristol Myers Squibb said it would sell a popular psoriasis drug at an 80% discount via a new direct-to-consumer program ^[107]. Moves like this are aimed at appeasing populist pressure to make medicines more affordable, but they also mean lower margins on some drugs. Biotechnology investors have been warily watching these developments. The Nasdaq Biotechnology Index slid about 1.5% over the week, underperforming the broader Nasdaq. Part of that might be rotation out of healthcare into hotter areas like tech, but part is the policy overhang. Additionally, biotech had company-specific blows: for instance, Biogen (BIIB) announced it would discontinue all gene therapy programs (signaling a costly research dead-end) ^[108], and some smaller biotechs announced layoffs or trial setbacks. On the bright side, the FDA did approve a few new treatments (such as an expanded indication for Regeneron’s Evkeeza cholesterol drug ^[109]), showing innovation continues. But overall, the sector was a relative laggard in a week when risk appetite gravitated more to AI and cyclicals.

Summing up the corporate updates: the U.S. economy still appears resilient but with areas to watch. Consumer spending is positive yet selective (good news for discounters, trickier for luxury). Industrial activity and shipping are improving from earlier in the year’s doldrums. And healthcare companies are navigating a more interventionist policy environment. As Q3 earnings season kicks off in a couple of weeks, investors will parse results from major Nasdaq components (like Tesla, Netflix, Intel, etc.) to either confirm or challenge the narrative that growth remains intact. For now, early reports like Costco’s and FedEx’s present a nuanced outlook – not booming, not busting, but chugging along with hints of caution.

Analyst Insights & Market Outlook: Cautious Optimism into Year-End

As the week’s developments unfolded, Wall Street’s top strategists and analysts weighed in with their interpretations and forecasts. The consensus view could be described as “cautious optimism”: the market’s fundamentals and technical momentum are strong, but there are clear risks that need navigating.

On the bullish side, a standout call came from BMO Capital Markets, where chief investment strategist Brian Belski made headlines by raising his year-end 2025 price target for the S&P 500 to 7,000 ^[110]. (For context, the S&P 500 closed this week around 6,644.) Hitting 7,000 would imply roughly a 5% gain from here and cap off an impressive year. Belski’s rationale is that the backdrop is turning Goldilocks-like – not too hot, not too cold. In a research note, he pointed to Federal Reserve rate cuts, which should lower borrowing costs, “solidifying” corporate earnings, and a belief that the AI-driven rally is “not ANYWHERE near bubble territory” yet ^[111]. Moreover, he noted the stock rally has been broadening out beyond just the Magnificent Seven mega-cap tech names, which he views as a healthy sign ^[112]. Belski even drew parallels to 1995-1996’s “Goldilocks” market, a period of surging stocks amid falling interest rates and low inflation ^[113]. In his view, 2025 could be setting the stage for a mid-90s style boom, with tech leading the way but other sectors catching up. It’s an undeniably rosy outlook – essentially calling for the bull run to charge ahead.

Not everyone is so sanguine. Some analysts urge caution given how far and fast stocks have run. A note from Morgan Stanley’s strategist cautioned that equity valuations are pricing in a lot of good news and that any earnings disappointments in the coming weeks could spark a pullback. We are also heading into the seasonally choppy October period, which historically has seen market turbulence. And while the Fed is easing now, memories of 2022’s rapid rate hikes (and the adage “don’t fight the Fed”) are still fresh – if inflation were to surprise to the upside, the central bank could rethink its new dovish stance. One red flag mentioned by skeptics: the recent spike in oil prices (WTI crude is ~$65, up from <$55 over the summer). If energy prices continue rising, that could feed into inflation and consumer spending constraints, complicating the macro picture.

Several experts highlighted the importance of the upcoming data. Bruce Zaro of Granite Wealth noted investors are “positioning for quarter-end” now, but the real test will be how the market reacts to next Friday’s jobs report (Oct 3) and the subsequent CPI inflation reading in mid-October ^[114]. Those will either validate the Fed’s comfort in cutting rates or raise alarms. As Zaro put it, we’re likely to see “some volatility during this period and in the subsequent weeks because you have earnings coming” ^[115]. In other words, buckle up for potential swings as the tape gets flooded with new information.

Investor sentiment appears to be improving, ironically, after a couple of minor down weeks. The American Association of Individual Investors (AAII) survey this week showed bullish sentiment tick up and bearish sentiment fall to multi-month lows. This aligns with the fund flows data we saw – money is coming back into equities. Part of that is FOMO (fear of missing out) as people chase the AI trade. Part might be relief that the Fed seems to have inflation under control. However, contrarians note that when sentiment gets too bullish, it can be a contrarian indicator that the market is due for a shakeup. So that’s another element in play.

On the media side, financial news outlets were abuzz with talk of an “AI bubble or not?” The prevailing tone is that while certain AI story stocks may be frothy, the big players (Nvidia, Microsoft, Google, etc.) are delivering actual revenue growth from AI, so it’s not purely speculative. A Reuters analysis piece, for example, argued that today’s situation differs from the dot-com bubble – mega-cap techs are immensely profitable now and many are involved in AI, so the market may sustain higher valuations than in the past ^[116]. Still, if every company starts slapping “AI” on their press releases to get a stock pop, investors will have to discern real substance from hype.

There’s also the matter of the 2024 U.S. elections inching closer. President Trump’s actions this week (tariffs, tech rhetoric) could be seen as setting the stage for campaign themes. Election uncertainty typically isn’t a dominant market driver until the year of, but given Trump’s polarizing presence, some traders are already trying to game out scenarios (e.g., stricter tech regulations vs. supportive policies). For instance, Dan Ives at Wedbush explicitly tied some of his Tesla optimism to expectations that the Trump administration will fast-track autonomous vehicle approvals to help U.S. tech beat China ^[117]. If that thesis holds, we could see more examples of policy-driven investment calls.

In sum, the short-term outlook for the Nasdaq and broader market appears cautiously positive but highly data-dependent. The phrase “risk-on, but with eyes open” might capture it. The market is willing to climb the wall of worry – embracing AI, overlooking political noise, trusting the Fed – as long as the incoming evidence (earnings, economic data) doesn’t knock it off course. Should companies confirm strong earnings and guidance in October, analysts say the year-end rally could reassert itself. Conversely, any negative surprises (say, big tech revenue misses or an inflation uptick) could prompt a swift correction given high valuations.

For now, the major trend remains upward, and this week’s slight stumble hasn’t broken that. As the weekend arrives, investors can breathe a small sigh of relief that inflation is tame and the Nasdaq’s world-beating run is intact – even if a bit bruised. “The believability and comfortability of US stocks is back in full swing,” wrote BMO’s Belski in his bullish note ^[118]. Many on Wall Street share that sentiment, crediting the one-two punch of receding inflation and technological innovation for the market’s strength. But with an eventful final quarter ahead, markets will need to deftly balance innovation and inflation, greed and fear. The story of late 2025 is still being written, and if this week was any indication, it promises to be an exciting chapter for the Nasdaq and beyond.

Sources:

Reuters (Markets Wrap – Caroline Valetkevitch) ^[119] ^[120] ^[121] ^[122]
Reuters (Inflation data and Fed cuts) ^[123] ^[124]; AP/LA Times ^[125] ^[126]
Reuters (Trump tariffs announcement) ^[127] ^[128]; AP/LA Times ^[129] ^[130] ^[131]
Investopedia (Market recap & stock movers) ^[132] ^[133] ^[134] ^[135]
Reuters (Amazon FTC settlement – J. Godoy) ^[136] ^[137]
Reuters (Microsoft/Monaco story) ^[138]
Reuters (BMO strategist quote) ^[139] ^[140]
Teslarati/Wedbush (Tesla price target and quote) ^[141] ^[142]
Reuters (U.S. equity inflows on Nvidia/OpenAI news) ^[143]
Investopedia (Intel & Nvidia collaboration, Oracle TikTok) ^[144] ^[145]
Yahoo Finance/Morningstar (Micron earnings data) ^[146]
Reuters (Costco stock drop and commentary) ^[147] ^[148]
AP/LA Times (Market closing numbers, context) ^[149] ^[150]
Reuters (Weekly index highs/lows) ^[151]
Reuters (Fed official comments) ^[152]
Reuters (Analyst outlook – Brian Belski) ^[153]
Reuters (Inflation outlook amid tariffs) ^[154]