October 18, U.S. stock markets rallied, with the Dow Jones Industrial Average climbing over 250 points or 0.6%, as investors reacted positively to earnings reports from Morgan Stanley and other key players, offsetting recent losses driven by a downturn in the tech sector.

The tech-heavy Nasdaq Composite edged up by nearly 0.2%, while the S&P 500 increased by 0.3%, as markets sought to regain ground following Tuesday's retreat from all-time highs. The pullback was primarily due to ASML's unexpected cut to its 2025 sales forecast, which shook confidence in the lucrative A.I. chip market and impacted major tech stocks like Nvidia (NVDA, Financial).

Morgan Stanley's earnings, released before market open, signaled a robust revival in Wall Street fortunes, with a significant jump in profits attributed to a surge in dealmaking activities. The bank's shares surged by over 7% in response, highlighting a broader earnings boost across the financial sector this week.

However, the optimism was tempered by less favorable reports from other industry giants. ASML Holding (ASML, Financial and UnitedHealth Group (UNH, Financial) reported disappointing results, prompting investors to brace for potential weaknesses in other sectors. Notably, stocks such as Abbott, Alcoa, and Discover Financial Services were under scrutiny as they were slated to announce their earnings later on Wednesday.

In the commodity sector, gold prices hit record highs due to increasing political uncertainty. The recent tariff promises by Republican presidential nominee Donald Trump have intensified market volatility as traders weigh the implications of a closely contested U.S. presidential race.

This article first appeared on GuruFocus.