Market Insights - Week of October 19th

Major Indices Outlook for the Week Ahead

Welcome back to the Hobbs Trades weekly newsletter! As your go-to market analyst here at www.hobbstrades.com, I'm providing a comprehensive overview of the major indices—S&P 500, Nasdaq 100, Dow Jones, and Russell 2000—as we enter the trading week starting October 20, 2025. Last week's choppy trading saw mixed earnings results and lingering trade tensions cap upside, but a solid jobs beat and Fed speakers' dovish tones provided support, ending the period on a positive note. With the delayed September CPI report mid-week and earnings from tech giants like Tesla and Netflix, volatility may pick up as markets gauge inflation trends and corporate health. Broader trends remain upward, but keep an eye on rotations amid elevated valuations. Let's break it down.

Recent Performance Recap

Major indices notched modest weekly gains amid earnings digestion and labor strength, though Friday's rally faded late. The **S&P 500** closed at 6,664.01, up 0.53% on the day and 0.95% for the week, holding near records despite profit-taking. The **Nasdaq 100** advanced to 24,817.95, gaining 0.65% Friday and 1.32% weekly, buoyed by tech rebounds but pressured by semis volatility. The **Dow Jones** rose to 46,190.61, up 0.52% daily and 0.72% for the week, lifted by financials and industrials. The **Russell 2000** dipped to 2,452.17, down 0.6% Friday but up 1.15% weekly, extending its rotation but facing resistance.

October's early action builds on September's resilience, with the S&P 500 up 2.1% last month, bucking historical weakness. Valuations creep higher—S&P at 23x forward earnings, Nasdaq at 28x—but 8% projected 2025 EPS growth and easing expectations offer backing. Recent X chatter blends jobs optimism with tariff caution, traders targeting Nasdaq at 25,000 and Russell holds above 2,450, while noting overbought risks.

Key Price Levels for Futures

Futures steady near highs post-jobs, with CPI and earnings as key triggers. Here's what to watch for each index:

* **S&P 500 (ES Futures)**: Trading around 6,664, support near 6,653 (recent low), with cushions at 6,642–6,648 and deeper 6,617 if selling intensifies. Resistance at 6,675–6,700 (recent highs), eyeing 6,731 or 6,742 on dovish data.

* **Nasdaq 100 (NQ Futures)**: Near 24,818, support at 24,700, with 24,600–24,650 and 24,400 below. Resistance at 24,950 and 25,000 could yield to 25,200 if tech holds firm.

* **Dow Jones (YM Futures)**: Around 46,191, support at 46,100, with 45,900–46,000 and 45,500 as zones. Resistance at 46,400 and 46,500 may lead to 46,700 on cyclical rebound.

* **Russell 2000 (RTY Futures)**: At 2,452, support at 2,450, with 2,430–2,440 and 2,400 deeper. Resistance at 2,480 and 2,500 opens paths to 2,525+ on rotation strength.

Breakouts above resistances could extend gains on cool CPI; breaches below supports may spur corrections.

ETF Options Chain Insights

Options activity reflects cautious breadth, with volume elevated on October expirations (October 24, 2025) amid hedges for CPI. Implied volatility edges to 10-15% ATM, with put skew highlighting trade concerns. Key high open interest strikes:

* **SPY (S&P 500)**: Closed ~666. Calls at 670 (OI ~8,500, vol 45,000, IV ~6.5%) indicate upside bets; puts at 660 (OI ~7,200, vol 32,000, IV ~8.2%) show hedging. Mild call bias in records.

* **QQQ (Nasdaq 100)**: Closed ~599. Calls at 600 (OI ~2,100, vol 52,000, IV ~10.2%) reflect tech optimism; puts at 590 (OI ~6,500, vol 40,000, IV ~12.5%) highlight valuation guards. Elevated put volume on skew.

* **DIA (Dow Jones)**: Closed ~463. Calls at 465 (OI ~4,000, vol 200, IV ~9.8%) suggest cyclical plays; puts at 460 (OI ~900, vol 500, IV ~11.0%) point to balanced caution. Call edges out on rate relief.

* **IWM (Russell 2000)**: Closed ~246. Calls at 250 (OI ~1,800, vol 5,200, IV ~15.1%) show breakout hopes; puts at 240 (OI ~3,100, vol 3,500, IV ~17.3%) reflect rate sensitivity. Higher IV on puts amid rotation.

Call volume nudges ahead, but OTM put skew flags protection—geared for data-driven swings.

Economic Events to Watch This Week

CPI steals the show, delayed by shutdown, testing inflation cooldown. Key highlights:

* **Monday, October 20**: No major releases; earnings kick off with Netflix (post-market).

* **Tuesday, October 21**: Housing Starts (8:30 ET), Building Permits (8:30 ET); Existing Home Sales (10:00 ET).

* **Wednesday, October 22**: September CPI (8:30 ET), expected 2.4% YoY core; PPI (8:30 ET).

* **Thursday, October 23**: Initial Jobless Claims (8:30 ET); Durable Goods Orders (8:30 ET).

* **Friday, October 24**: Michigan Consumer Sentiment (10:00 ET); Tesla earnings (post-market).

Global trade talks persist, but U.S. inflation dominates—cooler prints could boost cuts, hotter ones cap rallies.

Outlook for the Week

Fed easing bolsters the backdrop, positioning S&P 500 and Nasdaq 100 for 9-14% year-end upside on 8% EPS paths. Dow targets 8-9% via cyclicals, while Russell 2000, at a 26% discount, eyes 2,550+ in rotations. Bullish above supports with CPI catalysts; bearish on hot prints or misses probing lows. Options tilt protected—expect spikes around reports.