October 25, 2025 Market Update

Market Recap: Steady As She Goes.

Stocks extended their gains this week as earnings reports came in largely positive and the limited flow of data, constrained by the government shutdown, pointed to continued but modest economic growth and contained inflation. Still, recent reports showed that U.S. activity has slowed in several regions, with softer consumer spending and a rise in layoffs. The mix of good and bad news has kept both bulls and bears in check for now.

In the bond market, yields eased slightly after recent gains, helped by another round of moderate inflation readings. The 10-year Treasury yield slipped from last week’s highs, while short-term yields held firm as investors weighed the odds of another rate cut before year-end. Credit markets remained calm, reflecting a generally stable outlook.

Taken together, the week’s action suggests Mr. Market remains cautiously optimistic that corporate profits will hold up, inflation pressures are manageable, and the economy will keep chugging along. Next week’s meeting between Donald Trump and Xi Jinping, along with earnings reports from major companies such as Tesla and Netflix, should give investors a clearer sense of where the markets go from here.

Market Performance

Market Commentary: A “Fantastic Deal” or Just a Temporary Truce?

The world’s two largest economies may soon be back at the negotiating table. President Trump and China’s Xi Jinping are expected to meet before the November 1 deadline for new U.S. tariffs, reviving hopes for a deal that could avert another round of trade tensions. Markets appear to be betting on peace, with shares of companies like Apple climbing to record highs on optimism that a breakthrough is coming.

Still, optimism may be running ahead of reality. Even if the two sides strike an agreement, or simply extend the current truce, the broader rivalry between Washington and Beijing is unlikely to fade. The U.S. is working to secure critical supply chains, including domestic rare-earth production, while China is doubling down on semiconductor self-sufficiency after bans that have shut out U.S. chipmakers.

Investors may welcome any pause in the trade conflict, but the forces driving it remain in motion. The next few weeks could bring a “fantastic deal,” as President Trump predicts, yet the long-term trend points toward greater economic separation between the two powers—a dynamic that could reshape global markets for years to come.

In Case You Missed It:  If no deal is reached by November 1, U.S. tariffs on Chinese imports will jump to 157%, driving up prices on electronics, clothing, tools, and other Chinese-made goods. Products that rely on Chinese materials and components will also be affected, so you may want to get an early start on your holiday gift list this year.