Market Insights: Friday, October 3rd, 2025

Market Overview

US stocks capped a strong week on Friday as Wall Street continued to embrace the AI-driven rally, setting new records even as the government shutdown dragged on and delayed key economic data. The Dow jumped 0.51% to a new all-time high after briefly touching 47,000 intraday, while the S&P 500 managed a fractional gain of 0.00%, also closing at a fresh record. The Nasdaq fell 0.28%, dragged lower by Tesla’s sharp drop, though the broader tone remained constructive.

The missing September jobs report was a notable absence Friday, with the shutdown leaving both Wall Street and the Federal Reserve in the dark. Despite the uncertainty, stocks pressed higher thanks to accelerating excitement in the AI space. OpenAI’s $500 billion valuation remained in focus, with new deals announced Friday adding to the momentum. Hitachi unveiled a partnership with OpenAI on energy infrastructure, while Fujitsu expanded its collaboration with Nvidia. Pharmaceutical stocks also surged, tracking toward their best weekly performance in over a decade.

The political backdrop remained tense, with no signs of a resolution to the shutdown. Democrats insisted on continued healthcare subsidies as a condition for reopening the government, while Republicans refused to negotiate until operations resumed. President Trump, meanwhile, intensified threats to fire federal workers and cut off funding to Democratic states. Markets have largely ignored the rhetoric thus far, focusing instead on the momentum in equities and crypto. Bitcoin added over 1%, closing above $122,000 and reinforcing investor appetite for risk.

SPY Performance

SPY finished flat, closing at $669.24 after opening at $670.02 and trading between $668.17 and a fresh high of $672.68. Volume came in at 65.21 million shares, right in line with the average. Friday saw another premarket rally to record levels, but early strength was sold, leading to a day of consolidation. SPY dipped midday to $668 before bouncing and holding steady into the close. Despite the rangebound action, the bulls retained control as the tape remained firmly above key support levels, and no material signs of weakness emerged.

Major Indices Performance

The Dow led with a 0.51% gain, notching its first close above 47,000. The Russell 2000 also outperformed, adding 0.68% and showing continued broadening participation outside mega caps. The S&P 500 closed unchanged after touching new highs, while the Nasdaq slipped 0.28%, largely due to weakness in Tesla. Despite the mixed close, all four indices ended the week with gains of over 1%, capping one of the strongest starts to a fourth quarter in recent years.

Notable Stock Movements

Tesla fell sharply again Friday, extending its recent slide amid concerns about future growth and regulatory support. Microsoft and Apple were the only Magnificent Seven stocks to close higher, up 0.33% and 0.35%, respectively. The rest of the group traded lower, reflecting broader rotation away from certain large caps. AI names continued to outperform, with momentum driven by OpenAI-related announcements and further gains in semiconductors. Pharma stocks were also standouts, with some notching their best weekly gains in over a decade.

Commodity and Cryptocurrency Updates

Crude oil inched up 0.31% to close at $60.67, holding near our model’s long-standing $60 downside target. Gold rose 1.14% to close at $3,912, as demand for safe-haven assets returned amid macro uncertainty. Bitcoin climbed 1.41% to finish above $122,367, marking another leg higher in its current uptrend and supporting broader risk-on sentiment.

Treasury Yield Information

The 10-year Treasury yield rose 0.88% to finish at 4.124%. Though still below the danger zone, the yield’s recent bounce underscores that macro risks remain in the background. Any move above 4.5% would begin to pressure equities, while 4.8% could spark broader selling and 5% or more would signal real trouble. For now, yields remain benign enough to support the equity rally.

Previous Day’s Forecast Analysis

Thursday’s forecast called for a range between $663.75 and $673.75, with bias at $672.50 and a leaning toward consolidation unless SPY could break and hold above that level. Targets above were set at $672.50 and $675, while downside levels included $668.50, $667, and $665.50. The roadmap also noted that dips near $668.50–$667 would likely be bought, and price was expected to trade in a controlled range barring a surprise breakout.

Market Performance vs. Forecast

SPY opened at $670.02, hit a high of $672.68, and retraced to a low of $668.17 before closing at $669.24. The session perfectly reflected the roadmap’s expectations. SPY tested the upper bias zone, failed to break cleanly above it, and consolidated for the remainder of the day. Dips were supported at the forecasted levels, and upside was capped near projected resistance. The analysis once again provided accurate guidance for intraday structure.

Premarket Analysis Summary

The 7:27 AM premarket report placed bias at $672.50 and highlighted upside targets at $675, with downside zones from $668.50 to $665.50. It predicted a consolidation day unless bias was cleanly cleared, and favored profit-taking near $672. The price action aligned closely, with the high of day stopping just above bias before sellers took control. Consolidation prevailed into the close, validating the premarket outlook.

Validation of the Analysis

Friday’s session played out in textbook fashion. SPY printed a new high just after noon, dipped to the 668 zone flagged in the roadmap, and was bought on cue. The range held all day and momentum stayed intact. Bulls maintained their edge, and resistance near $672.50 served as a perfect ceiling. With a flat close, the roadmap once again proved to be a reliable guide in navigating the session.

Looking Ahead

Monday and Tuesday bring no economic data, leaving the market to trade purely on sentiment and positioning. The shutdown continues, but unless it begins to hit earnings or credit markets, it’s unlikely to impact equities. SPY remains above all key levels and continues to close at or near record highs. Without a catalyst, we expect more grinding action with dips bought and breakouts faded. Bulls retain control above $663, with $675 the next upside magnet. A break below $665 could invite a brief shakeout, but the structure remains bullish.

Market Sentiment and Key Levels

SPY closed at $669.24, flat on the day but still within striking distance of resistance. Key resistance sits at $670, $672, $675, and $680. Support rests at $666, $665, and $660. Bulls are in control as long as SPY holds above $663. A move below $660 would weaken the structure, while a break below $640 remains the trigger for a deeper pullback. Until then, momentum remains with the bulls.

Expected Price Action

SPY’s projected range for Monday is $663.50 to $674.75, with the Put side dominating in a narrow but expanding band. This suggests potential for chop with bursts of momentum. The trend remains intact, but with the shutdown dragging on and no major news on the docket, the market may attempt to trap shorts again to fuel further gains. If SPY clears $672, $675 comes into view. If it breaks $665, watch $660 for next support. Above $675 lies heavy resistance that may cap gains temporarily.

Trading Strategy

Longs remain favored above $665, with dip zones at $663 and $660. Targets include $672 and $675. Shorts can be considered near $675–$680 on failed breakouts. The VIX rose slightly to 16.66, reflecting stability. We continue to advise quick profit-taking and caution with overnight positions. Volatility could reawaken if shutdown risks escalate, but for now, conditions favor dip-buying with protection in place.

Model’s Projected Range

SPY’s projected range for Monday sits between $663.50 and $674.75, with the Put side dominating in an expanding but narrow band that suggests choppy price action interlaced with periods of trending action. With very little economic news early in the week, it is likely the market continues to grind higher with pauses to consolidate and trap shorts. Once again today, another new all-time high was made which, like recent highs, was sold to entice shorts to the game. SPY closed flat at $669.21. The macro risk remains the shutdown, and the longer it goes the greater the risk. The market is looking past this as it should, given these are typically resolved quickly, but this could be different and more serious. A long shutdown will eventually force the market to take these external threats into consideration and multiples will contract. But until we see signs of weakness, it’s higher and higher we go. Overnight SPY gapped up slightly and around noon made a new all-time high. A pullback to $668 was bought and by the end of the day, it was a sideways consolidation session. We’ve noted over $663 the bulls resume full control of the market, and while volume was just average, the bulls still won’t let the bears crash this party. We are back to buying dips while being very careful fading rallies. With the index well above the critical $645 threshold and dips consistently bought, bulls are likely to continue pushing the market to new highs while bears are hibernating. They need to move SPY below $665 to even consider stepping in. Should that level fail, the market likely drops to $660, but if that holds, it will be another trap and the bulls will put on the squeeze once again. A decisive break of $640 is required to signal a true shift in the market and trigger our base case of a 10–15% pullback this year. For Monday, resistance sits at $670, $672, $675, and $680, with support at $666, $665, and $660. Above $675 there is a heavy wall of resistance which will likely limit gains on Monday. Since reclaiming $585, SPY has held a steady uptrend fueled by dip buyers. Mag stocks were mostly red with only Microsoft and Apple rising, but crypto and ETH moved strongly higher, resting comfortably above $4300 and supporting the risk-on bull case. A sustained close below $4300 combined with weakness in Mag leaders may point to market softness, but until that happens the market will move higher. We continue to favor quick profit-taking and caution with overnight holds. The VIX rose 0.18% to 16.66, suggesting continued market strength. We still recommend adding protection to any long book, as VIX below 23 supports the bullish case but a breakout above it could finally trigger the long-anticipated pullback. SPY closed well above the redrawn lower bull trend channel from the April lows, reinforcing the bull trend. 

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the day in a Bearish Trending Market State, with SPY closing just below MSI resistance. There were no extended targets in the afternoon session, but there were extended targets in the morning session which led to new all-time highs. The MSI spent most of the day in a bullish state after rescaling higher overnight. A drop from the highs saw the MSI rescale lower to a very narrow bearish state and then to a ranging state, just to end the day in a narrow bearish state. For Monday the MSI is implying sideways to possibly lower prices but not materially lower, absent an external event. MSI support is $668.17 with resistance at $669.10.
Key Levels and Market Movements:
On Thursday we wrote, “the market will continue to drift higher while consolidating along the way,” and noted, “with a close above $669 the market heavily skews to the bulls,” while also stating, “Given the market strength we will be very careful fading any pushes higher, making failed breakouts especially useful in this instance. Overnight the bulls want to defend no lower than $665, and if it holds once again, the market will continue to make new highs.” With that context, and with the MSI rescaling higher overnight with extended targets above, we waited for either a failed breakout near the highs to short or a test of MSI support to go long. While the market did set up a failed breakout at 10 am, with extended targets above, we did not get suckered into fading this high. Another failed breakout appeared just before noon but again, extended targets kept us sitting on our hands. Finally at 12:38 pm extended targets stopped printing and with price at a premarket resistance level of $672.50, we entered short with our first target at MSI resistance turned support at $671.20. A quick hit at this level confirmed we were in good shape on this countertrend short, so we set T2 at MSI support at $668.70 given this was also a premarket support level. It was a long way down, but we held onto our trade and sure enough, T2 was hit, leaving us little to do but trail. Then a failed breakdown presented at MSI support and with a very narrow bearish MSI, we exited our short and reversed long with a first target at MSI resistance at $670.50. Within an hour we had our first target and given how strong the first two trades were with large targets, we decided we didn’t want to play in this sandbox any further. We often go into profit protection mode after a large winning first trade, so we closed out our remaining position and called it a day. Two for two once again, 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 be a cornerstone of our consistent trading process.
Trading Strategy Based on MSI:
Monday and Tuesday have no news so it’s time to watch and trade what you see, given the external risks to the market. Without any external catalyst, it is likely the market retests lower levels such as $665 and possibly $660, only to trap bears and squeeze higher. The market does indeed need time to digest and consolidate, so it’s probable price moves in a range between $665 and $672 to build energy for another push higher. Given the market strength we will be very careful fading any pushes higher, making failed breakouts especially useful in this instance. Overnight the bulls want to defend no lower than $665, and if it holds once again, the market will continue to make new highs. A break of $665 will likely lead to $660, though this remains a low-probability event. As such, watch price action tomorrow and look for the MSI to provide direction, with expectations for more two-way trading as we continue to buy dips at major support or short on weakness at or near $672 on a failed breakout, remembering that the bears come to life in scale only on a drop below $640. As always, failed moves remain among the highest-probability setups. Stay nimble, avoid trades during Ranging Market States, and ensure full alignment with MSI. 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 $672 to $683 and higher strike Calls while buying $670 to $671 Call reflecting the Dealers desire to participate in any rally on Monday. The ceiling for Monday appears to be $672. To the downside, Dealers are buying $669 to $600 and lower strike Puts in a 3:1 ratio to the Calls they’re selling/buying displaying little concern that prices could move lower tomorrow. Dealer positioning is unchanged from slightly bearish/neutral to slightly bearish/neutral.
Looking Ahead to Next Friday:
Dealers are selling SPY $670 to $690 and higher strike Calls while selling $667 to $669 Puts implying the Dealers belief that prices may tread water near current levels but not fall below $667. Dealers only sell ATM Puts when they believe prices will move higher. The ceiling for next week appears to be $680. To the downside, Dealers are buying $666 to $540 and lower strike Puts in a 3:1 ratio to the Calls they’re selling, reflecting a bearish to neutral outlook for the week. For the week Dealer positioning is unchanged from slightly bearish/neutral to slightly bearish/neutral. 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

SPY closed at $669.24, remaining firmly in the bull zone. With the rally continuing and resistance within sight, we remain buyers of dips and sellers near major resistance. Respect levels, keep stops tight, and stay prepared for sudden shifts driven by macro headlines. The shutdown hasn’t cracked sentiment yet, but it could if prolonged.

Good luck and good trading!