The month of October was highlighted by a deluge of earnings, Fed hike speculation and presidential debates on the domestic front. The bottom line of the S&P 500 in fact returned to growth after quarters of earnings recession. As per the Earnings Trends report issued on October 26, 2016, earnings growth of the S&P 500 in Q3 is expected to be 1.4% on 1.4% higher revenues.

On the international front, the spotlight was on the ECB as tapering talks flared up and flattened too. Among emerging markets, Brazil hogged attention. The overall impact of these events was soft on bourses. Among the top ETFs, SPY was down 1.5%, DIA was off over 0.6% and QQQ was down over 1.3%.

Let’ take a look at the events in detail what drove the broader market in October.

Banking Earnings Soothe Nerves

Prior to the reporting cycle, all eyes were on banking earnings as their financial health was in question. But the clouds dispersed as big banking companies started reporting ahead of both earnings and revenue estimates in Q3 earnings. The likelihood of a Fed rate hike in the coming days was another tailwind for financial stocks. SPDR S&P Bank ETF (KBE - ETF report) gained about over 4.3% in October.

FBI to Add to Clinton Controversy

Just days before the presidential election, FBI’s probe into democratic candidate Hillary Clinton’s emails heightened uncertainty over election results. While the popularity for Clinton has been higher than Trump for a longer period, the race got closer at the eleventh hour.

As a result, Clinton-friendly stocks and ETFs got hit in recent times while republican candidate Trump-friendly investments got a lifeline. Since Trump is viewed as a dampener to Mexican currency and stocks,iShares MSCI Mexico Capped (EWW - ETF report) lost 2.4% in the last five days (as of October 31, 2016).

OPEC Deal Dicey?

While Iran was presumed to be a deterrent to the highly anticipated output cut deal by OPEC in Vienna in late November, Iraq threatened the agreement in October. Recently, Iraq indicated that it would not lower the attained oil output level of 4.7 million barrels per day, especially since the U.S. is ramping up production.

As a result, inverse oil ETFs like ProShares Short Oil & Gas (DDG - ETF report) , ProShares UltraShort Bloomberg Crude Oil (SCO - ETF report) and VelocityShares 3x Inverse Crude Oil ETN (DWTI - ETF report) gained significantly in the month.

Treasury Yields on Rise

With the U.S. economy expanding at an annualized rate of 2.9%, the highest clip witnessed over the past two years and several other economic readings coming in favorable, the Fed looks set to raise rates by the end of this year. This pushed up Treasury bond yields lately.

As a result, bond ETFs underperformed in the month, ushering ample gains on inverse bond ETFs like iPath US Treasury Long Bond Bear ETN DLBS and  Barclays Inverse US Treasury Composite ETN TAPR. Dividend ETFs too underperform in the wake of rising rates.

Biotech Blunder

Biotech stocks and ETFs were battered as increased regulatory scrutiny over high drug prices and political uncertainty surrounding healthcare reform in the looming presidential election wreaked havoc on this segment. Biotch ETFs including BioShares Biotechnology Clinical Trials (BBC - ETF report) , Loncar Cancer Immunotherapy ETF (CNCR - ETF report) , ALPS Medical Breakthroughs ETFSBIO and SPDR S&P Biotech ETF (XBI - ETF report) saw huge loses in October.

Merger News Picking Up Pace

The month witnessed the announcement of a few mega acquisition news. One was AT&T's (T - Analyst Report) buying of Time Warner (TWX - Analyst Report) . The deal is expected to be accretive in the first year itself according to AT&T and would generate $1 billion in yearly cost synergies within three years of the deal closure.

Another was Qualcomm Inc.’s (QCOM - Analyst Report) purchasing NXP Semiconductors NV for about $38 billion. The joint entity is expected to generate yearly revenues of over $30 billion, while $500 million in cost savings is likely to be realized yearly within two years of the closure. The deal is expected to be sealed by the end of 2017.

Such a surge in merger and acquisition activities puts IQ Merger Arbitrage ETF (MNA) and ProShares Merger ETF (MRGR) in focus.

Brazil Rate Cut

Brazil slashed interest rates by 25 bps for the first time in four years in mid-October, giving signs that the long-ailing economy is on the verge of a turnaround. As a result, Brazilian stocks rallied. Plus, parties connected with President Michel Temer tasted success in most of the cities holding mayoral elections.

This makes the case stronger for economic reforms, which the new president Temer is striving to push forward. In fact, the lower house of Congress recently agreed on a constitutional amendment to plug spending for 20 years. So, Brazil ETFs like iShares MSCI Brazil Capped (EWZ - ETF report) gained about 9% in the month