Weekly Market Commentary October 27th to October 31st 2025

As expected, the Federal Open Market Committee decided to cut interest rates by 25bps on Wednesday, bringing the target rate to 3.75%-4.00%. Fed Chair Jerome Powell was deemed to have a hawkish stance during his press conference as he threw cold water on the idea that a December rate cut is a certainty. With the government shutdown making little progress, it’s expected that the Fed will be without key data for their December decision, causing them to rely on private sector labor market data which has been weak. As a result, a cut in December is still likely. The Fed also announced an end to quantitative tightening effective December 1st as they will look to roll maturing agency debt into U.S. Treasury Bills.

Earnings for the third quarter have been exceptional thus far, with the earnings growth rate for the S&P 500 reaching 9.2%, above the 7.9% estimate. Mega-tech companies such as Alphabet and Amazon blew expectations of out the water with strong growth in revenue and their cloud businesses. Meta also had strong earnings results, but the numbers were overshadowed by skepticism surrounding the payoff from its aggressive AI spending plans.

The equity markets were positive on the week driven by positive trade deal developments between China and the U.S. which drove the market higher to start the week. The S&P 500 closed 0.7% higher at 6,840, the Nasdaq 2.2% higher to 23,725, and the Dow Jones Industrials 0.7% higher to 47,462. U.S. Treasury yields increased on the week bringing the 2-Year yield to 3.60% and the 10-Year yield to 4.09%.

As the U.S. government remains shut down, meaningful market data will continue to be postponed. If the shutdown lasts until Wednesday, it will officially become the longest government shutdown in history.