Monthly Market Update - October 2025

October is here, and the U.S. stock market delivered an uncharacteristically strong performance last month, closing out the third quarter with gains despite signs of a cooling labor market and concerns over a government shutdown. The Nasdaq Composite led the market with a 5.6% gain for the month, boosted by continued enthusiasm for artificial intelligence and a rebound in tech stocks. The index also closed its best September in 15 years. Inflation increased slightly to 2.9% year-over-year, mainly due to higher energy costs and new tariffs. The increase complicates the Federal Reserve's path toward its 2% target.

In September, forecasts predicted slowing U.S. real GDP growth to around 1.5% to 1.9% for 2025 and 1.5% to 2.1% for 2026, with continued challenges from high-interest rates, student loan burdens, and trade policy headwinds outweighing earlier Q3 growth driven by consumer spending and tech investment.

As we begin the final quarter of the year, managing your budget should be a priority. If you are looking for advice on meeting your financial goals before the year-end, please reach out so we can determine the best course for you. Contact our office today to schedule some time. We’re here to help! 

Stocks

September is historically the weakest month for the S&P 500, but this year it broke that pattern as stocks rallied, fueled by strong big-tech earnings. The Federal Reserve delivered its first interest rate cut in a year, lowering borrowing costs and giving an added boost to small- and mid-size companies. Investor optimism improved as easing financial conditions supported risk assets. As October begins and the fourth quarter gets underway, markets are hoping to avoid a late-year stumble. Historically, the final quarter tends to be the strongest for equities, supported by robust consumer spending through the holiday season.

Sector Performance

Eight of the eleven S&P 500 sectors gained ground in September, led overwhelmingly by large-cap technology and communication services names. The “Magnificent Seven,” Apple, Amazon, Meta, Google, Nvidia, Microsoft, and Tesla, continued to drive returns, extending a trend that has dominated the past two years. Defensive areas such as consumer staples and materials lagged as investors rotated toward growth and artificial intelligence themes. Despite September’s mixed leadership, every S&P 500 sector remains positive for the year. The broad equity market has staged a sharp rebound from its weak start earlier in 2025.

Bonds

Fixed income markets stayed steady in September, with bonds still offering the most attractive income in decades. Yields moved slightly lower as the Fed’s rate cut lifted bond prices, rewarding existing holders. The two-year Treasury yield ended the month at 3.61%, while the ten-year finished at 4.15%. Investors expect another 0.25%–0.50% in cuts before year-end, which could support prices but reduce yields available on newly issued bonds. Overall, fixed income remains appealing for income, but it faces the trade-off of slightly lower starting yields if interest rates continue to decline.

Economic Update

September’s data signaled a moderating labor market as prior job growth was revised sharply lower, indicating fewer workers were added than first reported. Even so, economic growth surprised to the upside, with second-quarter GDP revised up to 3.8% nearly double the typical pace. Inflation stayed stubborn, with headline CPI climbing to 2.9% from April’s 2.3% low, showing price pressures haven’t fully eased. This mix of cooling jobs and solid growth suggests the economy is slowing in a controlled way rather than stalling outright. Overall, the backdrop supports cautious optimism as the Fed looks to balance inflation control with sustaining expansion.

Impact Fundraising: Leading Wildlife Photographers Giving Back for Conservation

Did you know 75.7% of radiologists found AI-based algorithmic results reliable according to recent data?

This compelling statistic comes from a recent project exploring how the use of Artificial Intelligence could transform breast cancer screening. With the start of Breast Cancer Awareness Month, we are spotlighting Sian Taylor Phillips, a professor of population health, who is spearheading a new project examining the use of AI in transforming breast cancer screening.

Taylor Phillips is currently exploring science-backed improvements for the NHS. She describes the joy of working with the leading technology in medicine. She explains why she believes promoting positivity is instrumental in driving impactful changes. The Warwick University professor is a leader in health screening, synthesizing the latest research to inform policymakers' evidence-based decisions.

Her current project explores whether AI can transform screening for breast cancer, both by freeing up radiologists’ time to perform some of the precise analysis needed and potentially improving detection rates.

“It’s early days,” says Taylor-Philips, “but there are already some really promising results from smaller studies elsewhere, so it could make a real difference”.

The project brings together her professional and personal life. She adds, “I’ve been through the screening programs that I advise on. So that’s screening for cancer, but also for pregnancy and newborn babies. It’s gratifying to be offered screening programs that I’ve had an input on, knowing it’s improving the health of my own children.”

For Taylor-Phillips, the best way to achieve that is to be cheerful. She believes positivity is infectious and communicates itself to the patients as well. With a joyous attitude at the forefront and continuous advancements in technology, our healthcare systems can evolve for the better.

To continue reading about Sian Taylor Phillips’ story and the advances in our healthcare system, check out the full article here. To learn more about Breast Cancer Awareness month and how you can make a difference, visit the Susan G. Komen website.

THOUGHT FOR THE MONTH

^{Index Definitions}

^{Dow Jones Industrial Average:The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.}

^{Dow Jones U.S. Real Estate Total Return Index:The index is designed to track the performance of real estate investment trusts (REIT) and other companies that invest directly or indirectly in real estate through development, management, or ownership, including property agencies.}

^{NASDAQ Composite:The NASDAQ Composite is a market-cap weighted index of all issues listed on the Nasdaq stock exchange. It is heavily weighted towards the technology sector.} 

^{S&P 500 Bond Index:The S&P 500® Bond Index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large-cap U.S. equities. Market value-weighted, the index seeks to measure the performance of U.S. corporate debt issued by constituents in the iconic S&P 500.}

^{S&P 500 Consumer Discretionary:The S&P 500® Consumer Discretionary comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer discretionary sector.}

^{S&P 500 Consumer Staples:The S&P 500® Consumer Staples comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer staples sector.}

^{S&P 500 Energy:The S&P 500® Energy comprises those companies included in the S&P 500 that are classified as members of the GICS® energy sector.}

^{S&P 500 Financials:The S&P 500® Financials comprises those companies included in the S&P 500 that are classified as members of the GICS® financials sector.}

^{S&P 500 Index:The S&P 500® index is a market-cap weighted index of the largest 500 companies headquartered in the United States. The index covers approximately 80% of available market capitalization.}

^{S&P 500 Utilities:The S&P 500® Utilities comprises those companies included in the S&P 500 that are classified as members of the GICS® utilities sector.}

^{S&P U.S. Aggregate Bond Index:The S&P U.S. Aggregate Bond Index is designed to measure the performance of publicly issued U.S. dollar denominated investment-grade debt. The index is part of the S&P AggregateTM Bond Index family and includes U.S. treasuries, quasi-governments, corporates, taxable municipal bonds, foreign agency, supranational, federal agency, and non-U.S. debentures, covered bonds, and residential mortgage pass-throughs.}

^{S&P U.S. Treasury Bond Index:The S&P U.S. Treasury Bond Index is a broad, comprehensive, market-value weighted index that seeks to measure the performance of the U.S. Treasury Bond market.}

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