Market Recap - Week of October 20 through October 24, 2025

The S&P 500 index rose 1.9% this week to a new closing high as September consumer price data came in softer than expected, while companies including Intel ( INTC ) and International Business Machines ( IBM ) surpassed earnings expectations.

The S&P 500 ended Friday's session at 6,791.69. The market benchmark also reached a fresh intraday high on Friday at 6,807.11.

This week's gain brought the S&P 500 into positive territory for the month. It's now up 1.5% for October and 15% for the year.

Data released on Friday showed US consumer prices rose less than expected in September, while core inflation surprisingly ticked down, reinforcing expectations for another interest rate cut next week.

While these numbers, if accurate, are not bad, without unemployment numbers we don't have a context for the inflation picture.

Last Week’s Economic Reports

Economic reports have been delayed due to the US government shutdown. The September jobs report is still missing, and updates from the Bureau of Labor Statistics have been suspended until the government resumes operations.

S&P 500 Sector and Stylebox Returns

How to read the stylebox: The horizontal axis represents investment style, which can be value, blend, or growth for stocks and mutual funds. The vertical axis shows market capitalization for stocks divided into large, medium, and small categories. The number in each box represents the percentage growth of the category that is the intersection of the column and the row. For example, large-cap value is in the top-left corner of the box, so the large-cap value category is up by 12.4% YTD (year-to-date).

Thought of the Week

The 3Q 25 earnings season is off to a strong start. With 25% of market cap reporting, consensus is projecting year-over-year (y/y) EPS (earnings per share) growth of 8.5%, slightly above the long-term median of 8.0%. Looking at the three main sources of EPS growth, sales, margins and number of shares shares (i.e., buybacks) are expected to contribute 5.9, 3.6, and 1.0%, respectively.

Unsurprisingly, info tech and communications services are driving 60% of this quarter’s earnings growth, even as depreciation costs from AI investments start to bite. Still, it’s hard to argue with the results: the hyperscalers grew cloud revenues by an average of 24% in 2Q 25. But at a 31x valuation, good just isn’t good enough. Last quarter, one Mag 7 name beat earnings by 26% overall, but missed slightly on cloud revenues. The stock sold off by 8.4%–three times higher than the average decline for companies that actually missed on earnings.

The financials sector is also contributing a significant share of this quarter’s earnings growth. Consumers are cautious but not cracking, and deregulation, fed cuts and AI are compelling businesses to invest in, boosting capital markets activity and loan balances. But risks abound. In the consumer sectors, discretionary and staples profit margins are under pressure as discerning customers dampen revenues and tariffs increase costs. Lower income consumers will be facing cuts to SNAP and Medicaid benefits, and many households will be squeezed by the resumption of full student loan payments. Though fiscal stimulus will boost spending in the first half of 2026, we’re skeptical of the optimistic 15.4% and 15.0% EPS growth analysts are penciling in for 3Q 26 and 4Q 26.

Source: JP Morgan (edited)

Up Next

Economic data will continue to be light if the US government shutdown continues. The shutdown has delayed closely watched government data releases, including the September jobs report.

Thank you to all who attended this month's market Update webinar!

You can watch the replay here:

https://www.yourbestpathfp.com/post/monthly-market-update-webinar-october-2025.

The episode is also available wherever you listen to podcasts!