Wall Street to begin a historically strong month, but tariffs and more earnings

A stock market at all-time highs could get another boost from seasonals next month, though hurdles remain. Wall Street is on more-than solid footing heading into the final two months of the year. All three major averages were able to skirt major pitfalls in October to end the month higher, bringing their year-to-date gains to double-digit advances. The Dow Jones Industrial Average has climbed more than 11% this year, while the S & P 500 advanced more than 16%. The Nasdaq Composite is up by more than 22% now, with Nvidia just this week becoming a $5 trillion company. November should bring an extra seasonal boost. It’s the best month of the year for the S & P 500, averaging a 1.8% rise in data going back to 1950, according to the Stock Trader’s Almanac. In post-presidential election years, it’s the third-best month, with a typical gain of 1.6%. That suggests even further gains for a market that’s steadily climbed a wall of worry. The S & P 500 is now a stone’s throw away from 7,000, and far above the 6,555 year-end target that’s consensus among strategists . More bears are throwing in the towel, and bulls are advising not to bet against this market. “It’s a fool’s game to try and time this market on the way down. It will happen eventually. There’s no doubt,” said Giuseppe Sette, co-founder at Reflexivity. “But we have no signals from any form of checklist that you might run that the time is now.” Of course, there’s no shortage of challenges the stock market will have to get through. There are more earnings next week. There’s a major tariff case that will be heard at the Supreme Court, and the government shutdown is about to become the longest in history. The future for tariffs The Supreme Court is set to hear oral arguments on Nov. 5 on President Donald Trump’s tariffs, after Trump requested that it overturn lower court rulings that determined many of his wide-ranging levies were illegal. Trump himself has said that he may attend the session . The hearing may determine the fate of Trump’s tariffs. The court is consolidating two cases in the one session, meaning it will deliberate the legality of tariffs centered around fentanyl and immigration, as well as the president’s sweeping reciprocal tariffs that shocked markets back in April. Analysts expect the first have a higher likelihood of being upheld, while the reciprocal tariffs could be declared unconstitutional. Theoretically, a revocation of reciprocal tariffs would boost stocks, lifting names that were especially affected by the duties. But, if it also results in the return of revenues that have already been collected by the Treasury, that could hurt the bond market which is already preoccupied with a ballooning U.S. deficit. Ultimately, however, Raymond James Washington policy analyst Ed Mills said the result of the court case will do little to hurt Trump’s protectionist agenda. Even if the reciprocal tariffs are deemed illegal, he said, the president has other powers he can invoke to maintain levies. Even if the Supreme Court demands an immediate refund of revenues, it is unlikely everyone will get a refund — especially those publicly traded companies who are fearful of raising the ire of the administration. Besides, the tariffs up for discussion do not even include the Section 232 tariffs, or levies specifically on a growing list of goods that purportedly threaten U.S. national security. These include steel, copper, aluminum, as well as vehicles. “I’d be cautious to make very many investment decisions around this case because of the low probability of refunds occurring, and the high probability that the tariffs, as exists today, can still exist, but maybe just under a different process,” Mills said. Earnings, government shutdown Earnings season is more than halfway through now, and the results thus far have been good. The S & P 500 is now expected to post a blended growth rate of more than 10% in the third quarter, according to FactSet. Among the biggest contributors to that have been financials, information technology and utilities. Yet there remains a slog to get through, with more AI companies that could give insight into whether the names deserve their high valuations. Advanced Micro Devices , Super Micro Computer and Palantir are among the names reporting in the coming week. The U.S. government is still shut down as well, stretching into a fifth week. The jobs report for October that would have been released Friday, but will likely be delayed. Gregory Daco, chief economist at EY-Parthenon, calculates a shutdown will have a modest effect on real GDP growth, of about 0.13 percentage points per week, or a roughly 0.5 percentage point drag for 29 days. Yet, so long as the AI story remaining intact, stocks may continue to do well into the end of the…