Wall Street Extends Three-Week Win Streak as Market Recovery Continues from April Lows

This analysis is based on the Seeking Alpha report [1] published on November 1, 2025, which highlighted Wall Street’s three-week winning streak and October’s six-month positive run, underscoring the U.S. market’s remarkable recovery from April’s lows. The market demonstrated resilience despite mixed tech earnings results, Federal Reserve policy uncertainty, and shifting sector leadership patterns.

The U.S. equity market has shown substantial recovery strength over the past 60 trading days, with major indices posting impressive gains [0]:

• S&P 500
  : +7.63% to $6,840.19
• NASDAQ Composite
  : +11.30% to $23,724.96
• Dow Jones Industrial
  : +7.95% to $47,562.88
• Russell 2000
  : +11.54% to $2,479.38

The Russell 2000’s outperformance is particularly noteworthy, suggesting small-cap momentum that could indicate broader economic optimism beyond large-cap tech dominance [0]. For the specific week ending November 1, gains were more modest but positive: S&P 500 +0.7%, Dow +0.8%, and NASDAQ +2.2% [1].

Current sector performance reveals significant divergence in market leadership [0]:

• Energy: +2.81%
• Real Estate: +1.77%
• Financial Services: +1.38%
• Communication Services: +1.15%

• Utilities: -2.00%
• Technology: -1.74%
• Basic Materials: -1.30%

This rotation pattern suggests investors are shifting from high-growth technology to more defensive and value-oriented sectors, potentially reflecting changing risk appetites and concerns about tech valuations.

The Federal Reserve’s policy moves created mixed market signals during the week. While the widely anticipated 25-basis point rate cut and announcement of balance sheet winddown completion were received positively [1], Fed Chair Jerome Powell’s comments suggesting a December rate cut was “far from” a foregone conclusion introduced uncertainty [1]. This cautious stance could create volatility if economic data surprises in either direction.

The “Magnificent Seven” tech giants delivered markedly different results, highlighting the sector’s fragmentation:

• Amazon (AMZN)
  : +9.58% to $244.22, beating expectations across net sales, profit, and subscription revenues [0][1]
• Alphabet (GOOG/GOOGL)
  : Gained after reporting first-ever quarter with $100B in revenue [1]

• Meta Platforms (META)
  : -2.72% to $648.35 due to nearly $16B tax charge impacting earnings [0][1]
• Apple (AAPL)
  : -0.38% to $270.37 on quarterly revenue miss, particularly iPhone sales weakness in China [0][1]
• Microsoft (MSFT)
  : Declined despite topping expectations and delivering strong Azure growth [1]

The mixed performance, combined with elevated valuation multiples (AAPL at 36.19x, AMZN at 34.49x) [0], raises concerns about tech sector sustainability.

1. Small-Cap Leadership as Economic Indicator
   : The Russell 2000’s outperformance (+11.54%) [0] alongside sector rotation toward financials and energy suggests broader economic optimism beyond large-cap tech, potentially signaling healthy economic expansion.

2. China Trade Tensions Easing
   : President Trump’s Asia trip yielded positive outcomes, including a rare earths and critical minerals truce with China’s Xi Jinping [1]. This development could ease trade tensions and benefit global supply chains, particularly for technology and manufacturing sectors.

3. AI Infrastructure Investment Cycle
   : Tech giants are preparing to spend billions more on AI capex as the race intensifies [2], suggesting sustained investment in the technology sector despite near-term earnings volatility.

The sector rotation pattern indicates a potential structural shift in market leadership. Technology’s recent underperformance (-1.74%) [0] may signal a broader rotation away from growth stocks toward value and cyclical sectors, which could persist if interest rate expectations stabilize at higher levels.

1. Federal Reserve Policy Uncertainty
   : Powell’s cautious stance on December cuts could create market volatility if economic data surprises, particularly given the market’s sensitivity to interest rate expectations [1].

2. Tech Valuation Vulnerability
   : Mixed earnings results combined with high P/E ratios suggest the technology sector may be vulnerable to further corrections, especially if growth expectations are revised downward [0].

3. China Exposure Risks
   : Apple’s China sales weakness could signal broader consumer demand issues and highlight geopolitical risks to tech companies’ international revenue streams [0][1].

1. Small-Cap Momentum
   : The Russell 2000’s strong performance suggests continued opportunities in small-cap stocks, particularly if economic expansion broadens beyond large-cap beneficiaries [0].

2. Sector Rotation Benefits
   : Energy and financial services sectors showing strong momentum could continue to benefit from capital flows out of technology [0].

3. AI Infrastructure Investment
   : The ongoing AI capex cycle among tech giants [2] could benefit semiconductor, cloud infrastructure, and AI software companies despite near-term volatility.

The November-December period typically brings increased market volatility. Key factors to monitor include Fed meeting minutes, Q4 earnings guidance revisions, China trade developments, and institutional flow patterns during this typically volatile period [1].

The market’s recovery from April lows demonstrates underlying resilience, with the S&P 500 gaining 7.63% and NASDAQ 11.30% over 60 trading days [0]. However, mixed tech earnings results and sector rotation suggest evolving market dynamics. The Federal Reserve’s policy stance remains a key uncertainty factor, while positive trade developments with China could provide tailwinds. Small-cap outperformance and rotation toward value sectors indicate broadening market participation beyond technology leadership. Investors should monitor Fed guidance, tech valuation levels, and China trade developments for directional cues in the coming weeks.