Weekly Market Updates – Oct 27, 2025

Oct 27, 2025

The Markets

Stock markets celebrated, but bond markets were cautious.

Last week, the Consumer Price Index (CPI) showed that inflation for September was lower than economists had anticipated. Both headline and core inflation (the latter excludes volatile food and energy prices) rose 3.0 percent year over year.

“While the September figure is still a full percentage point above the Fed’s 2 [percent] target—and the highest level of inflation seen since January—it signals that the path of price growth is modest enough to allow for additional rate cuts,” reported Megan Leonhardt of Barron’s.

Investors had been concerned that a jump in inflation might cause the Federal Reserve (Fed) to stop lowering the federal funds rate. The better-than-expected inflation report gave markets confidence the Fed will continue to lower the fed funds rate this year.

Stock markets hit new records

Markets rose after the CPI was released. “The Dow Jones Industrial Average closed north of 47,000 for the first time on Friday…The Dow hit its second thousand-point milestone of 2025 after crossing the 46,000 threshold 31 trading days ago, according to Dow Jones Market Data. The S&P also notched its best week since Aug. 8,” reported Connor Smith of Barron’s.

United States Treasuries rallied following the inflation news, too, but retreated after S&P Global released the Flash US Composite PMI^® Output Index, reported Ye Xie of Bloomberg. The Index provides information about the state of U.S. manufacturing and services. A reading above 50 signals economic expansion, while a number below 50 suggests contraction.

In October, the preliminary composite reading was 54.8, a three-month high and well above September’s 53.9 reading. Indexes measuring activity in the manufacturing and services sectors both accelerated from September to October.

Faster growth is good news; however, bond investors recognized that it could affect the Fed’s rate-cut decisions. The Fed lowers the federal funds rate to stimulate the economy. If the business activity is growing, stimulus may be unnecessary.

Social Security benefits will be higher in 2026

CPI data was calculated, despite the government shutdown, because it is required to determine the cost-of-living increase for Social Security. In 2026, benefits will be 2.8 percent higher, the equivalent of about $56 per month on average, according to the Social Security Administration blog.

By the end of the week, major U.S. stock indexes were higher. Yields on many U.S. Treasuries with longer maturities moved higher over the week.

WEEKLY FOCUS – THINK ABOUT IT

“A change in the weather is sufficient to recreate the world and ourselves.”

– Marcel Proust, Novelist

Disclosures and resources:

* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.

Sources:
https://www.bls.gov/news.release/cpi.nr0.htm
https://www.barrons.com/livecoverage/inflation-september-cpi-report?mod=hp_LEDE_C_2  or go to  https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-27-25-Barrons-September-Inflation-Was-Softer-2.pdf
https://www.barrons.com/livecoverage/stock-market-news-today-102425?mod=hp_LEDE_C_3  or go to  https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-27-25-Barrons-DOW-Cracks-47000-3.pdf
https://www.bloomberg.com/news/articles/2025-10-24/us-treasuries-jump-as-inflation-report-reinforces-rate-cut-bets  or go to  https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-27-25-Bloomberg-Bonds-Erase-Post-CPI-Gains-4.pdf
https://www.pmi.spglobal.com/Public/Home/PressRelease/eb6ffb6222214cbfbb42d44541c5ebbe
https://www.federalreserve.gov/faqs/why-do-interest-rates-matter.htm
https://blog.ssa.gov/social-security-announces-benefit-increase-for-2026/
https://www.barrons.com/market-data?mod=BOL_TOPNAV  or go to  https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-27-25-Barrons-DJIA-SP-NASDAQ-8.pdf
https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2025
https://www.bloomberg.com/news/articles/2025-10-22/wildfires-and-severe-weather-drive-record-us-disaster-losses  or go to  https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-27-25-Bloomberg-The-US-Saw-Record-10.pdf
https://www.climatecentral.org/climate-services/billion-dollar-disasters
https://www.climatecentral.org/climate-services/billion-dollar-disasters/state-summary/united-states?begYear=2024&endYear=2025&s=beginDate%3Aasc&f=beginDate%3Abetween%3A20240101..20251231&ps=50
https://www.usnews.com/insurance/homeowners-insurance/climate-change-and-rates
https://www.goodreads.com/quotes/tag/weather?page=2

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