Weekly Market Commentary
October 9th, 2025
A Strong Quarter Meets Growing Concerns
The third quarter of 2025 brought plenty of good news for investors, even as economic signals painted a more complicated picture. Here are the main highlights:
Stocks continued to climb
Strong earnings, ongoing excitement around artificial intelligence (AI), and hopes for a Federal Reserve (Fed) rate cut pushed U.S. equities higher throughout Q3. Both the S&P 500 and Nasdaq-100 extended their winning streaks, notching some of their best September performances in decades, according to Nasdaq Market Intelligence.
Stocks becoming too expensive
While market momentum was undeniable, it came at a cost. Stock valuations have surged to levels not seen in more than twenty years, leaving some analysts concerned about whether future earnings can justify the price tags investors are paying. If corporate results disappoint, a market pullback could follow.
Economic cracks start to show
Revisions to U.S. employment data raised eyebrows in September. Updated reports revealed that nearly one million fewer jobs were created over the last year than initially reported, the largest adjustment since 2002. This raised doubts about both the health of the labor market and the reliability of early economic data.
Fed trims interest rates
As expected, the Fed cut its benchmark rate by a quarter point, citing softer job growth despite lingering inflation concerns. Investors are betting on further cuts before year-end, though Fed officials remain cautious, warning that inflation is still above the central bank’s 2% target.
Consumers turn cautious
Despite stock market strength, consumer confidence slipped. The University of Michigan’s Consumer Sentiment Index showed declines in August and September, with most demographic groups reporting a weaker outlook—except for households with significant stock holdings, whose sentiment held steady.
Data as of 9/26/25 | 1-Week | Y-T-D | 1-Year | 3-Year | 5-Year | 10-Year |
Standard & Poor’s 500 Index | 1.10% | 14.20% | 17.80% | 23.40% | 14.50% | 13.00% |
Dow Jones Global ex-U.S. Index | 2.7 | 24.8 | 16.7 | 17.7 | 7.5 | 5.5 |
10-year Treasury Note (yield only) | 4.1 | N/A | 3.9 | 3.7 | 0.8 | 2.1 |
Gold (per ounce) | 3.1 | 48.8 | 46.8 | 32.6 | 15.3 | 13.1 |
Bloomberg Commodity Index | 0.2 | 6.7 | 3 | -2.2 | 8.2 | 1.7 |
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.
Could the Government Shutdown Derail Market Confidence?
The fourth quarter began with a political standoff in Washington, leading to a federal government shutdown after lawmakers failed to pass a short-term funding bill. While past shutdowns have had limited market impact, analysts warn that this one could create temporary turbulence.
Here are some areas to watch if the shutdown lingers:
IPO delays– The Securities and Exchange Commission (SEC), operating on minimal staff, has paused processing of new initial public offerings, leaving companies planning to go public stuck on the sidelines.
Drug approval bottlenecks– The FDA is continuing with applications already under review but is unable to accept new ones, which could create longer-term challenges for pharmaceutical companies.
Federal contractor disruptions– Some government contracts continue under previous appropriations, but many require interaction with furloughed federal employees, creating delays and complications.
Data blackout– Key agencies like the Bureau of Labor Statistics and the Census Bureau halt economic reporting during shutdowns, limiting the flow of data that policymakers and investors rely on.
The financial impact of the shutdown will depend largely on how long it drags on. Short disruptions tend to leave markets largely unscathed, but prolonged ones can erode confidence and slow business activity.
Weekly Focus – Think About It
“Economic statistics are like a compass. Even if imperfect, they’re essential to navigate uncertainty.”
—Janet Yellen, U.S. Treasury Secretary