Review & Preview: Where Are the Bears?

Oct 09, 2025 17:44:00 -0400 by Connor Smith | #Feature

Gone Fishing? The stock market hit another small bump today, but not before the S&P 500 and Nasdaq Composite touched their highest intraday levels on record.

The S&P 500 closed down 0.3%, while the Nasdaq was off 0.1%. Both lost steam in Thursday morning trading after they hit record closing highs yesterday. The Dow Jones Industrial Average fell 243 points, or 0.5%.

Stocks got off to a strong start after PepsiCo and Delta Air Lines reported quarterly results (more on that below), but the earnings trickle wasn’t enough to boost the rest of the market.

There’s plenty of chatter on Wall Street regarding froth, be it in the context of meme stocks, record highs, or the continued rally in shares of firms that could benefit from future artificial intelligence spending.

Meanwhile, the labor market is bending but not breaking and interest rates are likely heading lower. And so, the bears are on the retreat.

“With respect to stock market sentiment, I have to throw out the red flag today after seeing the Investors Intelligence survey with Bulls rising to 57.7 from 53.7 while Bears fell to just 15.4 from 16.7,” writes Peter Boockvar, chief investment officer of One Point BFG Wealth Partners. “That’s the least amount of Bears since the summer of 2024 and the spread of 42.3 exceeds my extreme threshold of 40.”

In this week’s American Association of Individual Investors survey, 45.9% of respondents were bullish about the stock market in the next six months, while only 35.6% were bearish.

“Bottom line, the sentiment is now ebullient and from a contrarian standpoint we should take note,” Boockvar writes.

Such sentiment shifts are viewed by some as a contrarian indicator. As Berkshire Hathaway CEO Warren Buffett would say: be fearful when others are greedy.

“It always seems like a sucker’s bet to put any money into the market when it’s trading at all-time highs,” writes Bespoke Investment Group co-founder Paul Hickey. “As the seemingly intelligent pundits will say, the easy money has been made (even though they were never out there a year ago saying the easy money is about to be made).”

And yet, historically, it hasn’t really been a foolish move to buy at records, Hickey notes. Since 1953, the S&P 500’s historical returns following a close at a record high is only “slightly less positive” than its average return for all periods since 1953.

“The best strategy for passive investors, especially, is not to overthink things,” Hickey writes.

Easier said than done.

Company

Last

Chg

Chg%

Dow Jones Industrial Average

45,479.60

-878.82

-1.90%

S&P 500 Index

6,552.51

-182.60

-2.71%

NASDAQ Composite Index

22,204.43

-820.20

-3.56%

Market Data as of

The Hot Stock: Albemarle +5.3%
The Biggest Loser: Dell Technologies -5.2%

Best Sector: Consumer Staples +0.3%
Worst Sector: Industrials -1.5%

Created with Highcharts 9.0.1Thursday, Oct. 9Index performanceSource: FactSetAs of Oct. 13, 4 p.m. ET

Created with Highcharts 9.0.1Oct. 1300.250.500.751.001.251.501.752.002.252.50%Nasdaq CompositeS&P 500Dow industrials

What’s the Deal With Airline Stocks?

Delta Air Lines gave Wall Street an earnings season appetizer worth talking about, but other airlines stocks couldn’t stick the landing.

Delta reported adjusted earnings of $1.71 a share and adjusted revenue of $15.2 billion, which topped expectations for earnings of $1.52 a share and sales of $15.1 billion, my Barron’s colleague Callum Keown reports. Callum writes:

The company firmed up its full-year guidance, now expecting EPS of $6—up from a range between $5.25 and $6.25. Analysts were looking for $5.80, according to FactSet.

Corporate travel and revenue from premium seats were particularly strong in the quarter. Corporate sales jumped 8%, while premium revenue grew 9%.

TD Cowen analyst Tom Fitzgerald said it was a “very positive report across-the-board.” He added that the most positive read-through was for United, given its exposure to premium, international and corporate travel. Fitzgerald has Buy ratings on both Delta and United.

“Momentum is continuing into the final stretch of our Centennial year, positioning us to deliver strong December quarter earnings,” Delta CEO Ed Bastian said.

The report initially kicked off a rally in other airline stocks: The US Global Jets ETF was up about 3.5% earlier in the morning. But it settled down 0.3% after United Airlines Holdings cut its early gain in half and American Airlines Group fell more than 6% from its intraday high.

Did traders decide the results weren’t enough to justify the big jumps in the Jets ETF? Or did the gains get washed out as a part of the broader market’s pullback? We’ll hear from both United and American Airlines later this month.

Whatever the case, it’s not the first time this year that the “Jets” got off to an early lead only to end the day a loser.

The Calendar

The University of Michigan releases its Consumer Sentiment survey for October tomorrow. The consensus estimate is for a 54.5 reading, slightly less than September’s 55.1. Consumers’ expectations for the year ahead inflation was 4.7% in September, and 3.7% for longer-run inflation. There has been a deep disconnect for several years, between a rising stock market and dour consumer sentiment.

What We’re Reading Today

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