Weekly Market Commentary October 6th to October 10th 2025

With the Federal Government shut down and an already light schedule of releases, we don’t have much to report as far as economic data this week.  Timely employment and inflation data are critical to the Federal Open Market Committee as they debate potential rate cuts and most everything that is scheduled simply comes with a “DELAYED” notation.  Look for the chaos to broaden if the government is continually closed for business.

We did get the minutes from the Fed’s September meeting and they generally showed that more rate cuts are coming.  The “dot plot”, a chart showing anonymous projections of the federal funds rate of each of the FOMC members for the next few years, showed a close split as to how many rate cuts to expect before the end of the year.  In speeches this week, multiple Fed officials touted concern for the weakening labor market gaining ground on the fight to lower inflation.  In theory, cutting interest rates should help the employment situation but could also reignite inflation.  The next meeting of the FOMC will be October 28-29 and should the government shutdown not be over by then, Fed governors will be flying blind on a month’s worth of critical economic metrics.

The equity markets saw another positive week…. until Friday when President Trump ratcheted up the tariff rhetoric with China again; and announced that massive federal worker layoffs will begin.  Markets were on pace for more all-time highs and then got walloped late Friday morning.  The S&P 500 closed down 2.4% to finish at 6,553; the Dow Jones Industrials dropped 2.7%; and the Nasdaq ended up losing 2.5% for the week.  Bond’s rallied across the curve on the week, with the 10-Year U.S. Treasury closing at 4.05%.

Next week’s holiday-shortened schedule includes Retail Sales, Producer Prices, Housing Starts/Building Permits, and multiple Fed governor speeches.  This, of course, assumes we get more than just “DELAYED” results.