October 2025 Market Review & Commentary

We hope you are well and that your preparations for Thanksgiving are going smoothly. On another note, we deeply appreciate all those who have served or are currently serving our country—your dedication and that of your families is invaluable. Happy Veteran’s Day to all!

In October, equities faced several hurdles but still achieved their sixth straight month of gains, showing resilience in the face of the government shutdown and ongoing trade uncertainty. Robust third-quarter corporate earnings helped sustain this positive momentum in a period known for market volatility.

The S&P 500 Index rose by +2.27%, and the Dow Jones Industrial Average increased by +2.51%.

At the start of October, investor sentiment was cautious amid concerns about government funding. The Senate failed to pass proposals that could have prevented a shutdown, resulting in the longest shutdown in history as of this summary. The Federal Reserve cut rates by -0.25% during the month, and with the next meeting set for December 9-10, market participants are keeping a close watch on alternative economic indicators. Developments from China and international agreements on rare earth metals may also be important for year-end market performance.

By sector, five of the eleven S&P 500 sectors ended the month with positive returns, underscoring technology’s strong impact. The Technology sector led the quarter with a (+6.68%) gain, outperforming the broader index by over four percentage points. Health Care (+3.65%) and Utilities (+2.17%) also contributed to market gains. In contrast, Materials (-4.41%), Communication Services (-3.01%), Financials (-2.78%), and Consumer Staples (-2.67%) lagged behind.

Employment-wise, private employers cut payrolls by -32,000 in September, marking the largest drop in two and a half years and falling far short of economists’ expectations for a +45,000 increase. Job losses were broad, except for growth in education and health services. Furthermore, August employment figures were revised down from an initially reported +54,000 jobs gained to a decrease of -3,000. The Bureau of Labor Statistics did not release its nonfarm payroll report for September.

Looking ahead to year-end, outlooks remain cautiously optimistic due to Fed rate cuts, excitement around AI, and strong earnings. However, high valuations, ongoing questions about AI investments, and slowing job growth moderate expectations, even as hopes for a market rally continue.