Stock Market Insight 01 Oct 25

Here is my insight on US stock market

Greg

10/1/2025

Current Trend

The S&P 500 closed at 6,718.48 on October 1, up from 6,664.92 the previous day, marking a fourth straight session of gains and a new record despite the shutdown's onset. This +0.8% daily jump pushed the index over 6,700 for the first time, driven by strength in drug stocks and broader optimism around Federal Reserve policy shifts. Year-to-date, the benchmark is up roughly 15-20%, but the shutdown introduces volatility risks that could test this momentum.

Fear and Greed Index

Investor sentiment is hovering in neutral territory across both stocks and crypto, signaling neither panic selling nor euphoric buying – a balanced but potentially precarious state.
  • CNN Fear & Greed Index (Stocks): At 53 (neutral) as of October 1, reflecting steady market breadth but rising volatility concerns tied to fiscal drama.
  • Crypto Fear & Greed Index: Sitting at 49 (neutral), with Bitcoin's recent pump not yet tipping into greed territory. This mirrors a market digesting gains without overextending.

Seasonality

October kicks off the strongest quarter of the year (Q4), with historical data favoring bulls: The S&P 500 averages +1.4% returns in October alone, and the October-December trio has delivered nearly 2% average gains since 1950 (over 6% in the last five years). However, it's also the most volatile month, infamous for major crashes (e.g., 1929, 1987), though post-crash recoveries often follow. With shutdown noise in the mix, expect heightened swings – think "trick" more than "treat" this Halloween season.

Gold and Crypto

Safe havens are shining amid the chaos:
  • Gold: Prices soared to a fresh record near $3,895 per ounce on October 1, up over 45% year-to-date, as investors flock to the metal during fiscal uncertainty. Spot gold traded at $3,859.30 early October 2, underscoring its role as a shutdown hedge.
  • Crypto (Bitcoin): BTC rallied 4%+ to $118,503 on October 2 from $114,024 the day prior, kicking off "Uptober" – a seasonally bullish month for digital assets. Trading around $114,322 late October 1, it's up amid risk-on flows but vulnerable if equities falter.