To The Moon

$NVIDIA(NVDA)$

The U.S. stock market has entered the final quarter of the year with optimism, momentum, and no shortage of debate. After a surprisingly resilient September rally, investors are now asking the inevitable question: does October continue the trend, or is a correction finally due?

History offers mixed clues. September and October are notorious for volatility, with October in particular having witnessed some of the most infamous market crashes in history—1929, 1987, 2008. At the same time, October has often marked turning points where new bull markets begin.

This year, the S&P 500 is up 13.25% year-to-date through September, a solid performance by any standard. Yet it still lags last year’s blistering 20% YTD pace by this time, when AI enthusiasm and easing inflation set Wall Street ablaze. With the market now sitting at fresh highs, the question is whether this bull market still has youth on its side—or whether investors are standing on shakier ground than they realize.

Historical Perspective: Why October Matters

No discussion of October is complete without acknowledging its infamous history:

• 1929: The Great Depression began with October’s market collapse, sending stocks spiraling down for years.

• 1987: “Black Monday” occurred on October 19, with the Dow Jones plunging 22% in a single session.

• 2008: The global financial crisis deepened in October as major institutions collapsed and the S&P sank over 16% in that single month.

But October’s reputation as a “crash month” hides an important nuance—it is also a month of reversals. After deep declines, October often marks the end of bear phases and the start of recoveries. In many years, October is the pivot point between market uncertainty and year-end rallies.

For example:

• In 2002, October marked the bottom of the dot-com bust.

• In 2011, October sparked a powerful rally after the U.S. debt downgrade.

• Even in 2022, the October lows became the launchpad for a 2023 rebound.

This dual identity makes October uniquely important—it can either deliver painful corrections or create some of the best buying opportunities of the year.

September 2025 in Review: A Rally Against the Odds

Heading into September, sentiment was cautious. Investors were worried about valuations, Fed uncertainty, and historical seasonality. Yet the market delivered gains, led again by mega-cap tech and select international rebounds.

• Tesla (TSLA): Shares surged on improving delivery expectations, alongside optimism around AI-driven autonomous driving.

• Apple (AAPL): Despite muted iPhone demand fears, Apple stock climbed steadily, fueled by services growth and buyback momentum.

• Nvidia (NVDA): Continued its wild ride higher as AI enthusiasm remained intact, though volatility persisted.

• Alibaba (BABA): Delivered a surprise rebound, reflecting improving sentiment toward Chinese equities after months of selling pressure.

For traders, these moves offered multiple profit-taking windows. For long-term investors, September underscored a familiar reality: bull markets often climb a wall of worry.

Comparing 2025 vs. 2024: A Different Bull Market Character

At this time last year, the S&P 500 was up nearly 20% YTD, fueled by a wave of AI enthusiasm that sent Nvidia, Microsoft, and other tech giants soaring. Inflation was cooling rapidly, and investors were pricing in multiple Fed rate cuts.

This year looks different:

• More cautious leadership. The rally has been narrower, concentrated in a few mega-caps rather than broad-based participation.

• Higher-for-longer backdrop. The Fed’s messaging has shifted. Rate cuts may still be on the horizon, but the central bank is cautious about declaring victory on inflation.

• Mixed earnings season. While many tech names continue to deliver, industrials, financials, and consumer discretionary have shown uneven results.

The takeaway? This bull feels younger and more fragile than last year’s. The upside is intact, but the fuel behind it is less explosive.

Macro Drivers Heading Into October

To understand where October may lead, investors must weigh the key macro drivers at play:

1. Federal Reserve Policy

The Fed remains the single biggest variable. With inflation data stabilizing but not collapsing, the Fed is in no rush to cut rates aggressively. Higher-for-longer policies mean equities face continued competition from bonds.

2. Earnings Season Approaches

Q3 earnings reports will arrive in mid-October. Companies like Tesla, Microsoft, Amazon, and Apple will set the tone. If earnings hold up, the bull case strengthens. If margins compress, volatility could spike.

3. Global Growth Signals

China’s economy remains a wildcard, and Europe continues to struggle with sluggish growth. However, any positive policy surprises abroad could act as tailwinds.

4. Geopolitical Risks

From U.S. election-year uncertainty to ongoing global conflicts, headlines could weigh on sentiment. October is notorious for surprise catalysts.

Sector Outlook: Who Wins and Who Struggles in October?

Technology

Still the backbone of the rally, though valuations are stretched. Earnings resilience will be key to justify current multiples. NVDA, MSFT, and TSLA remain focal points.

Financials

Banks face margin pressure but could benefit from stabilization in bond yields. October earnings will reveal credit quality trends.

Industrials & Energy

Cyclicals may outperform if global growth surprises on the upside. Energy stocks in particular could see volatility tied to oil prices.

Consumer Discretionary

The U.S. consumer remains resilient, but October retail data will be critical. Any sign of spending slowdown could spook markets.

Investor Playbook: October 2025

Given the historical, technical, and fundamental backdrop, what should investors do?

For Bulls

• Focus on quality mega-caps with strong balance sheets.

• Add selectively on pullbacks rather than chasing highs.

• Consider exposure to energy and industrials for diversification.

For Bears

• Watch for technical cracks in the S&P 500 and Nasdaq.

• Use October volatility to build hedges with options.

• Monitor high-valuation names like NVDA for sharp reversals.

For Opportunists

• Be ready to buy fear if October delivers its usual volatility.

• History shows that October pullbacks often create entry points ahead of year-end rallies.

Final Thoughts

The September rally has left many investors both relieved and uneasy. On one hand, the bull market continues to prove skeptics wrong. On the other, valuations and seasonal risks are flashing caution signs.

October’s history tells us two things: expect volatility, but also expect opportunity. Whether this bull market is still young—or already showing signs of exhaustion—will likely be determined in the weeks ahead.

As always, the winners will be those who stay disciplined, keep emotions in check, and use volatility to their advantage.