Market Insights: Tuesday, October 28th, 2025

Market Overview

Stocks jumped to new record highs on Tuesday as Nvidia surged nearly 5%, igniting another rally in tech ahead of tomorrow’s pivotal Federal Reserve decision. The Nasdaq led with a gain of 0.8%, the Dow rose 0.4%, and the S&P 500 notched its third consecutive record close with a 0.2% advance. The day’s move was driven by optimism surrounding AI and big tech earnings, with Nvidia’s rally gaining steam after CEO Jensen Huang declared that the AI industry has “turned a corner” during a keynote address at the company’s GTC event. Shares soared to a new record, buoyed by a slew of new partnerships and rising investor enthusiasm.

Anticipation is now building for this week’s key reports from Alphabet, Apple, Meta, Amazon, and Microsoft, many of which are due after Wednesday’s close. Apple added to the excitement by crossing a $4 trillion market cap, while Amazon made headlines by announcing plans to cut 14,000 jobs just days before reporting. Broader earnings highlights on Tuesday included results from Visa, UnitedHealth, UPS, and PayPal, as the season reached a critical juncture. Meanwhile, the Federal Reserve kicked off its two-day policy meeting, with markets fully pricing in a second consecutive rate cut. Attention is squarely on Chair Jerome Powell’s guidance for December, especially as the ongoing government shutdown has forced a data blackout.

On the geopolitical front, President Trump signed a series of trade and rare earth agreements with Japan, praising Prime Minister Sanae Takaichi and setting the stage for Thursday’s meeting with Chinese President Xi. With trade progress and AI enthusiasm fueling sentiment, equities continued to grind higher, even as the VIX ticked up slightly ahead of Wednesday’s likely volatility spike.

SPY Performance

SPY opened at $687.03 and traded in a relatively tight range for most of the day. After dipping to a session low of $684.83, it climbed as high as $688.90 before closing near its open at $687.00, up 0.26% on the session. Volume came in light at 53.83 million shares, reflecting a cautious but bullish tone ahead of Wednesday’s Fed decision. SPY continues to hover near all-time highs with bulls holding the upper hand as key support levels remain intact.

Major Indices Performance

The Nasdaq led with a gain of 0.80%, fueled by Nvidia’s rally and broad strength in tech. The Dow rose 0.34%, while the S&P 500 added 0.20%, marking a third straight record close. The Russell 2000 fell 0.49% as small caps lagged, failing to participate in the broader rally. Leadership remained concentrated in large-cap tech, with bullish momentum largely intact.

Notable Stock Movements

Nvidia surged nearly 5% to a new all-time high, driving strength in the chip sector and helping push the Nasdaq higher. Among the Magnificent Seven, most stocks closed green except Alphabet, which fell 0.66% ahead of earnings. Microsoft and Apple continued to trade near record highs, while Amazon and Meta saw modest gains as traders positioned ahead of their reports. The rally in AI-related names continues to set the tone for broader tech sentiment.

Commodity and Cryptocurrency Updates

Crude oil dropped 2.25% to $59.93, breaking the $60 threshold that has acted as a magnet for weeks. With our model having forecasted this level for some time, the next leg down could extend toward $50. Gold declined 1.13% to $3,974 as demand for risk assets remained strong. Bitcoin fell 0.82% to close just above $113,500, consolidating recent gains and showing some fatigue amid rising macro anticipation.

Treasury Yield Information

The 10-year Treasury yield eased by 0.50% to close at 3.978%, continuing to hold just under the critical 4% level. While current levels remain supportive of equities, yields above 4.5% would begin to present headwinds, with 5.2% seen as the danger zone for a larger correction. For now, bond markets remain relatively calm heading into the Fed.

Previous Day’s Forecast Analysis

Monday’s roadmap projected resistance at $686 and $688. SPY opened at $687.03, briefly pushed through resistance to $688.90, and closed back at $687.00. The bias level at $685 held all day, validating the model’s expectation that price would hover in a tight band ahead of Wednesday’s news. No downside targets were hit, and the upper targets capped gains as forecasted.

Market Performance vs. Forecast

SPY followed the model almost exactly, staying above the $685 bias and trading cleanly between projected resistance levels. While the session produced a small-bodied candle, the move validated the model’s view of consolidation with a bullish lean. Tuesday’s action reflected classic pre-FOMC positioning with low volatility and strong directional alignment.

Premarket Analysis Summary

Tuesday’s premarket analysis suggested limited upside to $687.20 and possibly $690, with $685 as the key pivot. SPY respected this zone all day, trading as expected with no material breakdowns. The roadmap also correctly cautioned against aggressively chasing long setups unless new momentum emerged, which did not occur during regular hours.

Validation of the Analysis

Price remained within forecasted levels throughout the session. The roadmap and MSI provided accurate structure and risk parameters, keeping traders focused and on the right side of the trend. Today’s modest range was no surprise, and the plan once again delivered reliable guidance.

Looking Ahead

SPY’s projected maximum range for Wednesday is $680 to $694.25, with broader price movement expected around the FOMC announcement. Resistance is found at $689, $692, $694, and $696. Support is located at $686, $683, $681, and $676. With bulls firmly in control, any dip into support zones is expected to be defended aggressively. Volatility will increase, and traders should prepare for outsized swings.

Market Sentiment and Key Levels

SPY closed at $687.00, comfortably above the $670 bull/bear line. The VIX rose 3.99% to 16.42, a modest uptick reflecting pre-FOMC nerves. Bulls remain in control, but volatility could temporarily interrupt the trend depending on the tone and guidance from Chair Powell. Until $683 fails, bears remain sidelined.

Expected Price Action

Wednesday’s action will hinge on the Fed. If SPY holds $685 and pushes above $689, a test of $692 or even $694 is likely. A rejection at $689 or loss of $683 could trigger a backtest of $681 or lower. Expect a muted morning followed by explosive movement into the 2:00 PM announcement.

Trading Strategy

Focus on levels: long setups favored above $685, with upside targets at $689 and $692. Avoid trading during the FOMC release window unless highly experienced. Fade failed breakouts or breakdowns if alignment returns post-announcement. Stay flexible, keep stops tight, and wait for confirmation before acting.

Model’s Projected Range

SPY’s projected maximum range for Wednesday sits between $680 and $694.25, with the Call side dominating in a widening band that suggests trending price action interlaced with chop leading into the FOMC announcement. Continued positive tariff developments and anticipation of strong megacap earnings pushed the market to yet another all-time intraday and closing high, with SPY finishing up 0.27% at $687.06. While the session ended with a “doji,” signaling some indecision, the underlying strength of the bulls remains undeniable. With major earnings from Meta, Microsoft, Amazon, Apple, Google, Lilly, Visa, and Mastercard on deck, the rest of the week is likely to bring sharp swings in both directions but still favors the bulls. With SPY closing well above the $670 bull/bear dividing line, bullish control remains intact, though average volume suggests digestion may occur before Wednesday’s FOMC statement. Momentum continues to lean heavily in favor of the bulls, and fading this strength remains a losing game. Bears stay sidelined unless a clear catalyst reverses sentiment, with the first real downside test coming only if $683 fails. A break below could lead to a test of Tuesday’s lows or even a gap fill, though buyers are likely to step in aggressively near $681. If bulls maintain control above $685, the next upside targets are $689 and $692, with minimal resistance above $692. The broader trend remains decisively higher, fueled by relentless dip buying despite ongoing macro risks such as the government shutdown and tariff chatter. However, with the FOMC on deck, traders should expect outsized volatility, with SPY potentially swinging as much as $30 in either direction during the announcement. Absent a catalyst, resistance for Wednesday sits at $689, $692, $694, and $696, with support at $686, $683, $681, and $676. Crypto and most Mag stocks rallied again, reinforcing the market’s risk-on posture and confirming the strength of the current trend. As we’ve stressed for weeks, until sustained weakness appears in key leaders and crypto, the larger trajectory remains upward. Persistent softness in those areas could still trigger the 10–15% correction we’ve projected, but with each passing week that likelihood shifts further into 2026. For now, the bulls remain firmly in control, and price action continues to validate that stance. The VIX rose 3.99% to 16.42, reflecting slight pre-FOMC jitters but still well below the 23 threshold associated with market stress. SPY closed mid-channel within its April bull trend, a structure that continues to support further upside momentum. 

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the day in a Ranging Market State, with SPY closing mid-range. Extended targets printed for much of the afternoon session which saw prices take off higher, reaching just shy of $689 before selling off into the close. Overnight the market trended mostly sideways but rallied at prior to the open reaching $687 before succumbing to profit taking. But once again the dip was bought and after a brief rescale to a ranging and even bearish state, the MSI began a series of rapid rescalings higher with extended targets to reach new all-time highs. from the premarket until the end of the day indicating the herd was participating in the day’s fun. For Wednesday’s session, the MSI is forecasting a bit of rest and consolidation between $685 and $688 as the market gets ready for FOMC. MSI support is $685.80 with resistance at $687.73.
Key Levels and Market Movements:
On Monday we wrote, “the bulls have reinforced a clear risk-on signal, implying an all-clear environment,” and noted, “the market is expected to move sideways and consolidate rather than extend sharply higher, though a break of today’s high remains possible,” while also stating, “it’s unlikely SPY meaningfully exceeds $690 before Wednesday’s FOMC meeting.” With this context, and with the MSI in a bullish state at the open and no extended targets printing, we considered a short at $687 but followed our own guidance and stayed flat given the strength of the uptrend. SPY pulled back to a premarket support level, and we waited for a failed breakdown to confirm a long setup. That opportunity came at 11:34 am on a less-than-perfect failed breakdown, prompting a long entry at $685.10 with T1 set at MSI resistance at $686.10. The reversal played out smoothly, and by 1 pm T1 was achieved. The MSI then rescaled higher, providing a clear T2 at $687.15, which was reached shortly after. With both targets in hand, we tightened our stop to breakeven and let the position trail to capture any continuation higher. As the MSI continued to rescale upward with extended targets, it appeared possible SPY could push toward $690 as outlined in the plan. However, at 3:28 pm, a textbook failed breakout formed and extended targets stopped printing, signaling exhaustion. We exited our remaining runner at $688.50, locking in solid gains and calling it a day. One and done thanks to a clear plan, disciplined execution, and strong alignment between MSI signals, our broader market model, and key technical levels. The MSI continues to prove its reliability as the cornerstone of our trading process.
Trading Strategy Based on MSI:
Wednesday morning will likely bring some profit-taking as SPY tests both the day’s highs and lows while markets wait for the FOMC decision. Expect mostly sideways to slightly higher price action early, but once the announcement hits, be ready for anything as moves of $30 in either direction, or even both, wouldn’t be surprising. While the path of least resistance remains higher, history shows that when several megacap stocks report in the same week, markets often pull back, as rallying into earnings tends to be a poor setup. Trade what you see and use the MSI as your guide. Additional tariff or government headlines may continue to influence short-term sentiment, but with VIX near 16, the bulls have clearly signaled a “risk-on” environment. Pre-FOMC, SPY is unlikely to move meaningfully above $690, yet the bulls remain firmly in control and will look to defend $685 overnight to sustain upward momentum, while the bears need $683 and then $681 to fail to push price below $680. With SPY closing well above $680, bullish momentum remains dominant, and we continue to favor buying dips while staying flexible and prepared for sharp volatility following the FOMC release. The key level for the broader bull market remains $640, and only a decisive break below that threshold would hand full control to the bears. Failed breakouts and failed breakdowns remain the highest-probability setups in this environment, and with major data releases hitting in the premarket, traders should stay flexible, avoid entries during Ranging Market States, and ensure full alignment with the MSI before acting. Providing real-time insights into market control, momentum shifts, and actionable levels, the MSI when integrated with our Pre-Market and Post-Market Reports continues to sharpen execution precision and elevate trade quality. If you haven’t yet integrated MSI and our model levels into your process, now is the time. Contact your representative to get started as these tools are designed to support consistency and enhance performance.

Dealer Positioning Analysis

Summary of Current Dealer Positioning:
Dealers are selling SPY $688 to $705 and higher strike Calls implying the Dealers’ belief that prices may stall near today’s levels. Dealers are no longer selling ATM Puts…today once again they were spot on. The ceiling for Wednesday appears to be $692. To the downside, Dealers are buying $687 to $600 and lower strike Puts in a 2:1 ratio to the Calls they’re selling displaying no concern that prices could move lower on Wednesday. Dealer positioning is unchanged from neutral to neutral.
Looking Ahead to Friday:
Dealers are selling SPY $688 to $707 and higher strike Calls implying the Dealers’ belief that prices may stall near today’s highs. The ceiling for the week appears to be $696. To the downside, Dealers are buying $687 to $560 and lower strike Puts in a 5:1 ratio to the Calls they’re selling, reflecting a market that is hedged heavily given its’ lofty levels. This is not necessarily bearish, but instead with options relatively inexpensive, Dealers are fully hedged for what may come. We suggest any long book do the same. For the week Dealer positioning is unchanged from bearish to bearish but again Dealers have added protection as SPY makes new highs daily. We advise reviewing Dealer positioning daily for directional clues. These positions evolve quickly and tracking them is essential for staying ahead of shifting market sentiment.

Recommendation for Traders

Trade the roadmap. Longs remain favored above $685 with resistance targets at $689 and $692. Avoid chasing volatility spikes during the Fed event. Let the dust settle and follow MSI alignment. Bulls retain control unless $683 and $681 are lost.

Good luck and good trading!