Market Recap - Week of September 29 through October 3, 2025
- Gordon Achtermann, CFP®, CSRIC®, MBA
- Oct 7
- 3 min read
The S&P 500 index rose 1.1% this week to its highest close ever, boosted by strong gains in the health care sector amid an agreement between Pfizer (PFE) and the Trump administration.
The S&P 500 ended Friday's session at 6,715.79 and is now up 14% for the year. It also reached a record intraday high on Friday at 6,750.87.
On Tuesday, the market benchmark ended September with a 3.5% gain, its fifth consecutive monthly increase. The index rose 7.8% in the third quarter.
The market started the final quarter of 2025 with healthcare stocks rallying after President Donald Trump said Pfizer agreed to provide some of its most popular medications at "heavily discounted prices." The agreement was seen as lifting a cloud of uncertainty that had been hanging over the sector and is expected to be followed by deals with other drug makers.
The health care sector logged a 6.8% gain for the week, followed by a 2.4% increase in utilities and a nearly 2.3% rise in technology. Industrials, materials, and real estate also edged higher.
Last Week’s Economic Reports
Consumer confidence fell in September to 94.2 (a measurement of 100 indicates normal confidence, so below 100 indicates a lack of confidence).
JOLTS job openings rose to 7,227,000
Several economic reports have been delayed due to the US government shutdown. The September jobs report was due this Friday, but 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 the 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 is the growth in % 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
Drawn to their attractive all-in yields, investors have continued to invest in riskier public and private corporate debt this year, even as high-yield spreads to Treasuries hover around their tightest levels since mid-2007. However, despite still-elevated rates keeping yields enticing, investors should consider the quality of companies backing this debt. This will be particularly relevant for below investment grade companies if we enter a period of slower economic growth, or even a recession, as there will be an outsized impact on these borrowers. Below-investment-grade companies comprise the high-yield, leveraged loans, and private credit markets. One metric used to assess credit risk is issuer-weighted default rate, which measures the number of defaults by issuer -- not dollar amount. As shown in this week's chart, despite headline issuer weighted default rates remaining low across riskier public and private credit, there may already be signs of stress building up under the surface. This is observed by looking at increased default rates, including distressed exchanges, non-accruals, and other out-of-court restructuring agreements that lenders and borrowers negotiate to avoid bankruptcy. Among leveraged loan and private credit users, the usage of provisions such as “amend and extend” and “payment-in-kind” has ticked up noticeably higher over the last several quarters to aid struggling borrowers. While lenders using these mechanisms for troubled credits is generally not worrisome under solid economic conditions, it could be a precursor to wider-spread trouble for already risky companies should economic conditions deteriorate.
While the resumption of rate cuts will help struggling borrowers with their debt burden on floating-rate loans, investors may want to consider diversifying their public and private credit allocation to add more core, high-quality exposure within each asset class.
Source: JP Morgan (edited)
Up Next
Data scheduled for next week includes the August trade deficit, consumer credit, and wholesale inventories. The minutes of the Federal Open Market Committee's September meeting are also scheduled for release.
Thank you to all who attended this month's market Update webinar!
You can watch the replay on YouTube at https://www.youtube.com/watch?v=ELf7pF8K1fY. The episode is also available wherever you listen to podcasts!
Want more?
You can always find our latest Monthly Market Update webinar and past webinars here:
All the Best,
Gordon Achtermann, CFP®
703-573-7325
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