Markets Cheer Softer Inflation, but Bonds Stay Cautious
The stock market had reason to celebrate last week as fresh inflation data brought welcome news — but the bond market wasn’t as quick to join the party.
The Consumer Price Index (CPI) for September revealed that both headline and core inflation rose 3.0% year over year, coming in slightly below economists’ expectations. Core inflation, which strips out volatile food and energy prices, also reflected a steady but cooling trend.
While that’s still above the Federal Reserve’s 2% target, analysts saw it as a sign that price pressures are moderating enough to keep the Fed on track with potential rate cuts later this year.
“The September figure is still a full percentage point above the Fed’s target…but modest enough to allow for additional rate cuts,” noted Megan Leonhardt ofBarron’s.
The report reassured investors who had feared that a sudden uptick in inflation could force the Fed to pause its rate-cutting cycle. Instead, optimism spread across the markets.
Stocks Hit Record Highs
Following the CPI release, major indexes climbed to new milestones. The Dow Jones Industrial Average broke above 47,000 for the first time, marking its second 1,000-point advance in just over a month, according to Dow Jones Market Data. The S&P 500 also posted its strongest weekly gain since early August.
U.S. Treasuries initially rallied on the inflation news but reversed course after S&P Global’s Flash U.S. Composite PMI® came in stronger than expected. The reading of 54.8 — a three-month high — signaled expanding business activity across manufacturing and services sectors.
That kind of economic strength, while encouraging, could complicate the Fed’s timing on rate cuts. If business activity continues to accelerate, policymakers may see less need for further stimulus.
Social Security Benefits Set to Rise in 2026
Despite the recent government shutdown, CPI calculations continued — as they’re essential for determining Social Security cost-of-living adjustments (COLA). Beneficiaries can expect a 2.8% increase in 2026, which translates to roughly $56 more per month on average, according to the Social Security Administration.
By week’s end, U.S. equity markets finished higher overall, while yields on longer-term Treasury notes also moved upward.
Data as of 10/24/25 | 1-Week | Y-T-D | 1-Year | 3-Year | 5-Year | 10-Year |
Standard & Poor’s 500 Index | 1.9% | 15.5% | 16.9% | 21.4% | 14.8% | 12.6% |
Dow Jones Global ex-U.S. Index | 1.5 | 25.1 | 20.1 | 17.8 | 7.5 | 5.0 |
10-year Treasury Note (yield only) | 4.0 | N/A | 4.2 | 4.2 | 0.8 | 2.1 |
Gold (per ounce) | -2.9 | 57.2 | 50.2 | 35.5 | 16.7 | 13.4 |
Bloomberg Commodity Index | 1.7 | 8.7 | 7.6 | -1.3 | 8.0 | 2.1 |
S&P 500, Dow Jones Global ex-US, Gold, and Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested in directly. N/A means not applicable.
Is Extreme Weather the New Normal?
For decades, the National Oceanic and Atmospheric Administration (NOAA) tracked weather disasters costing over $1 billion each. When that database was discontinued earlier this year, a nonprofit stepped in to continue documenting these costly climate events — and the latest numbers are eye-opening.
Between 1980 and mid-2025, the U.S. endured 417 weather and climate disasters, with total damages exceeding $3.1 trillion and more than 17,000 deaths.
In just the first half of 2025, there were 14 separate billion-dollar events totaling over $101 billion in losses — the most ever recorded in a six-month period.
Here’s a snapshot of some of the year’s most destructive weather events so far:
Major U.S. Weather Events in 2025 (January–June)
January
Wildfires in Los Angeles —$61.2 billion
February
Storms and tornadoes across the Southeast —$1.6 billion
March
Severe storms across the Southern and Central U.S. —$1.4 billion
180+ tornadoes across multiple states —$10.6 billion
Hailstorms and flooding in Texas —$1.2 billion
Tornadoes and high winds across the North Central U.S. —$1.9 billion
April
Tornadoes and flooding from the mid-Mississippi Valley to the Ohio Valley —$4.3 billion
Severe storms across the Plains and Midwest —$2.4 billion
Widespread hail and tornadoes from Texas to New England —$1.9 billion
May
60 confirmed tornadoes across Central and Eastern states —$5.9 billion
Tornado outbreak in the Central and Southeastern U.S. —$2.6 billion
Severe storms in Texas, Oklahoma, Louisiana, and Mississippi —$1.2 billion
June
Tornadoes in the Southeastern and Central U.S. —$2.4 billion
High winds and hail across North Central and Northeastern states —$2.8 billion
How This Impacts Home Insurance Costs
The growing frequency of extreme weather is reshaping the U.S. insurance market. As natural disasters intensify, insurers face record-high payouts — and those costs are being passed on to homeowners.
“Extreme weather events such as hurricanes, wildfires, and floods are becoming more frequent and more destructive… insured property losses now routinely approach $100 billion per year,” reportsU.S. News & World Report.
That means homeowners' insurance premiums are climbing, especially in regions prone to wildfires, floods, or severe storms. Some insurers have even reduced coverage availability in high-risk areas or raised deductibles to manage exposure.
For homeowners, this underscores the importance of reviewing coverage regularly and working with a trusted independent insurance broker who can shop multiple carriers for the best rates and protection.
Weekly Focus – Think About It
“The frequency and severity of weather-related losses are exponential… Climate change, let’s not make a mistake, is the number one long-term economic risk.”
— Jerome Haegeli (Group Chief Economist, Swiss Re)