Welcome to the Breakfast Club, your weekly dose of market insights and trading strategies! Join us live every Monday and Wednesday at 8:30 AM ET on Traders Reserve Live, where our experts break down the latest market movements, share actionable trade ideas, and answer your most pressing questions.
After last week’s surge — fueled by the Fed’s quarter-point rate cut and strong AI enthusiasm — the markets opened today with a pause. This is natural digestion after an extended rally, but it sets the stage for what could be an exciting week ahead.
Small caps, represented by the Russell 2000, are finally catching a bid. Historically, rate cut cycles have helped the Russell outperform, so this could be the start of an important shift we’ll continue to monitor.
A Different Kind of Labor Puzzle
One of the most important conversations today was around the labor market. Despite a strong economy and AI-driven productivity gains, we’re seeing persistent weakness in job additions and strange downward revisions in labor data.
Here’s the working theory: instead of passing higher tariff costs onto consumers, businesses may be absorbing them by cutting back on hiring. It’s not an easy theory to prove with clean data, but it makes sense — labor is one of the biggest expenses for any company, and one of the easiest levers to pull back when margins are under pressure.
If this continues, it could mean two paths ahead: either businesses start adding back labor to fuel growth, or tariffs finally get passed through to consumers. For now, it’s a dynamic we’re watching closely.
The AI² Stock Surge
If there’s one story that refuses to fade, it’s AI². Last week, several under-the-radar names posted jaw-dropping returns.
- VERI: +46.7% in one week, including a single-day +28% surge.
- AMPX: +39.4%, breaking out after months of consolidation.
- IONQ: +15.9%, extending its momentum.
- INOD: +5.3%, a steady extension of gains.
- COHR and CRDO: modest but positive, both up on the week.
These aren’t fringe penny stocks. The volume tells the real story: VERI traded nearly 4M shares/day and AMPX nearly 18M shares/day. That kind of liquidity means institutional players are circling.
Breadth Check: What’s Hot, What’s Not
Jeff highlighted that while tech remains dominant, the breadth across sectors is still healthy.
The takeaway? There’s room for rotation. Defensive groups like consumer staples could bounce, while overheated areas like tech may cool temporarily. And with October seasonality historically bullish, this sets up some intriguing plays heading into Q4.
Energy Watchlist
Energy stocks haven’t been the most exciting part of 2025, but seasonality says it’s time to start paying attention again.
The standout here was Diamondback Energy (FANG). Jeff laid out a simple, low-cost options play:
Not a recommendation, but a classic example of how we look for trades where seasonality, support levels, and option pricing align.
Equal Weight Strength
While the headlines fixate on the S&P 500, the equal-weighted USA Index (EUSA) is quietly confirming the rally.
This shows the market’s strength isn’t just the Mag-7 — participation is broadening, which is exactly what we want to see for a sustained move higher.
Free Trade of the Week
Finally, Jeff shared a free seasonal setup: HPQ (HP Inc.).
At ~$27–28/share, the stock doesn’t scream excitement, but history says it quietly outperforms in this window. Sometimes the boring trades pay just as reliably as the flashy ones.
Looking Ahead
All of this builds toward tonight’s AI² Virtual Trading Summit at 5 p.m. ET.
If you’ve been waiting to see what’s powering the next multi-trillion-dollar wave — beyond Nvidia and the Mag-7 — this is it.
We’ll be back Wednesday morning at 8:30 AM EST on “Breakfast Club Live” with more market insights. But don’t wait. Watch the full video now to see the strategy in action.
Ready to see how we apply this knowledge to our trades? Join our trading community and get access to the tools, data, and strategies that are helping us win week after week. Join Traders Reserve today.
