October 20, 2025
The government shutdown dominated headlines last week, halting key economic data and leaving investors to rely on private signals. Even so, markets held steady on expectations of another Federal Reserve rate cut at month-end.
Earnings have been mixed while regional bank jitters and shifting tariff talk from the administration added volatility — but resilience is the theme for equity markets.
With that overview noted, let’s look at the most important things you need to know.
Stock Index Performance
- The S&P 500 gained 1.70%.
- The Nasdaq 100 jumped 2.08%.
- The Dow Jones Industrial Average climbed 1.56%.
Economic Data & Shutdown Impact
- The economy enters mid-October in a fog, with the three-week shutdown freezing key reports from inflation to payrolls. September’s Consumer Price Index (CPI) is delayed until October 24th, and jobs and spending data are on hold indefinitely. This leaves the Fed “flying blind” as it heads into its October 29th policy meeting.
- Investors are relying on private gauges. Jobless claims suggest the labor market remains solid, though filings by furloughed federal workers are climbing. The Institute for Supply Management (ISM) manufacturing index ticked up to 49.1, still contractionary but hinting at stabilizing output and easing costs.
- The growth drag from the shutdown looks modest: about 0.15 percentage points of gross domestic product (GDP) per month by Goldman Sachs’ math. But the bigger risk is confidence, with gridlock weighing on business sentiment. Inflation expectations remain near 3%, and markets now largely expect one more Fed cut this month — more insurance than stimulus in a data-starved economy.
The Week Ahead
- U.S.-China tensions and political risk remain in focus. Investors are watching President Donald Trump’s stance on a proposed 100% tariff package after last week’s partial pullback, with any renewed escalation likely to hit industrials and semiconductor stocks.
- Meanwhile, the government shutdown is clouding economic visibility, draining an estimated $15 billion a week in lost output.
- Earnings season kicks into high gear this week, with S&P 500 profits expected to rise about 8%, led by tech, industrials, and financials. Energy and consumer staples are set to lag, while investors focus on margins under cost pressure, AI spending’s role in lofty valuations, and the impact of slowing global demand on cyclical revenues.
While Washington’s standoff lingers and markets keep a close eye on monetary signals, we remain focused on helping you cut through the noise. Periods like this can also open the door to new opportunities, and our priority is to guide you forward with clarity, confidence, and a long-term perspective.
Feel free to reach out to us anytime with concerns or questions. We are always here as a resource for you.
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