Market Updates

Market Update 10/06/25

The US stock market demonstrated resilience during the week ending October 3, 2025, posting modest gains across major indices amid an ongoing federal government shutdown. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all advanced, with the Dow leading the pack at a 0.95% weekly increase. This performance extended a bullish trend, with the S&P 500 and Nasdaq reaching new record highs earlier in the week despite political uncertainties. Looking ahead to the week of October 6, key influences include escalating concerns over the government shutdown, critical economic data releases such as employment reports, Federal Reserve communications on interest rates, and the onset of third-quarter earnings season. These factors could introduce volatility, though expectations for further Fed rate cuts may provide downside protection.

Performance Overview: Week Ending October 3, 2025

The trading week from September 29 to October 3, 2025, saw US equities largely shrug off the commencement of a government shutdown on October 1, which stemmed from stalled budget negotiations in Congress. Investors appeared to price in a short-lived disruption, focusing instead on positive macroeconomic signals and anticipation of Federal Reserve policy easing. All three major indices closed higher for the week, rebounding from a slight pullback in late September and continuing a multi-year bull market that has seen the S&P 500 gain over 18% year-to-date as of early October.

Key Index Performance

  • S&P 500 (^GSPC): The benchmark index rose 0.82% for the week, closing at 6,715.79 on Friday, October 3. Daily closes were as follows:
    • September 29: 6,661.21 (+0.05% from prior close)
    • September 30: 6,688.46 (+0.41%)
    • October 1: 6,711.20 (+0.34%)
    • October 2: 6,715.35 (+0.06%)
    • October 3: 6,715.79 (+0.01%)

The index notched a new record close on October 1 amid optimism that the shutdown would have minimal economic impact. Year-to-date, the S&P 500 is up approximately 13.72% as of the end of September, building on a 3.53% monthly gain.

  • Dow Jones Industrial Average (^DJI): The blue-chip index outperformed with a 0.95% weekly advance, ending at 46,758.28. Daily performance included:
    • September 29: 46,316.07 (-0.10% from prior)
    • September 30: 46,397.89 (+0.18%)
    • October 1: 46,441.10 (+0.09%)
    • October 2: 46,519.72 (+0.17%)
    • October 3: 46,758.28 (+0.51%)

The Dow’s strength was driven by gains in financials and industrials, sectors less sensitive to tech volatility. September returns stood at 1.87%, with year-to-date gains at 9.06%.

  • Nasdaq Composite (^IXIC): The tech-heavy index gained 0.84%, closing at 22,780.51 after a late-week dip. Daily closes:
    • September 29: 22,591.15 (-0.20%)
    • September 30: 22,660.01 (+0.30%)
    • October 1: 22,755.16 (+0.42%)
    • October 2: 22,844.05 (+0.39%)
    • October 3: 22,780.51 (-0.28%)

The Nasdaq hit a record intraday high on October 2, fueled by AI-related stocks, but pared gains on Friday due to profit-taking in semiconductors.

IndexWeekly Change (%)Closing Value (Oct 3)YTD Change (%)
S&P 500+0.826,715.79+13.72
Dow Jones+0.9546,758.28+9.06
Nasdaq+0.8422,780.51N/A*

*YTD data for Nasdaq not specified in sourced materials; approximate based on broader market trends.

Key Drivers of Last Week’s Performance

Several factors underpinned the market’s upward trajectory:

  • Government Shutdown Optimism: Despite the shutdown beginning on October 1, traders bet on a swift resolution, limiting downside. Stocks initially dipped mid-week but recovered, with the S&P 500 advancing 0.34% on October 1 alone.
  • Rate Cut Expectations: Markets priced in a 97% probability of a 25-basis-point Fed cut in October, up from 89% the prior week, supported by softening economic data like the ADP employment report.
  • Sector Rotation: Technology and consumer discretionary led early gains, while defensive sectors like utilities provided stability later in the week. Broader sentiment was buoyed by AI infrastructure news and seasonal tailwinds post-September.
  • Bond Market Support: Treasury yields declined, with the 10-year note falling to 4.11%, easing borrowing costs and supporting equity valuations.

Volatility remained subdued, with the VIX (fear index) averaging around 15, indicating low investor anxiety.

Potential Issues Affecting Performance: Week of October 6, 2025

The upcoming week presents a mixed outlook, with supportive monetary policy signals potentially offset by fiscal and economic headwinds. Earnings season kicks off in earnest, alongside high-impact data releases, which could amplify market swings if results deviate from expectations.

Major Influences

  1. Ongoing Government Shutdown: Now in its second week, the shutdown risks broader economic drag if unresolved. Non-essential federal services remain halted, potentially delaying economic reports and eroding consumer confidence. Analysts warn of impacts on sectors like travel and defense, with the S&P 500 vulnerable to a 1-2% pullback if negotiations stall further. A resolution could spark a relief rally, particularly in cyclicals.
  2. Economic Data Releases: Key indicators include:
    • Tuesday, October 7: Consumer Credit (August) – Expected to show moderation, signaling cooling borrowing amid high rates.
    • Wednesday, October 8: Wholesale Inventories and EIA Crude Oil Stocks – Inventory builds could pressure manufacturing sentiment.
    • Thursday, October 9: Initial Jobless Claims and Producer Price Index (PPI) – Sticky inflation via PPI might temper rate-cut bets; claims above 240K could heighten recession fears.
    • Friday, October 10: University of Michigan Consumer Sentiment (preliminary) – A drop below 70 could weigh on equities, especially retail-exposed stocks.

Weaker-than-expected employment data may bolster Fed dovishness but raise growth concerns.

  1. Federal Reserve Communications: Multiple Fed speakers, including regional presidents, are scheduled. Dovish tones on inflation and growth could reinforce cut probabilities (now at 86% for December), supporting stocks. However, hawkish surprises might trigger a sell-off, particularly in growth stocks.
  2. Corporate Earnings Season: Q3 reporting begins with banks like JPMorgan on Friday, October 10. Consensus expects 7.9% EPS growth for S&P 500 companies, but misses in tech or finance could exacerbate volatility. Positive surprises in AI-driven firms may lift the Nasdaq.
  3. Global and Geopolitical Factors: Emerging markets, particularly China (up 36% YTD), continue to outperform US equities, potentially drawing capital flows. A weakening USD (defensive amid shutdown risks) may aid exporters but pressure multinationals. Broader recession fears, including slowing spending and persistent inflation, linger as downside risks.

Overall, strategists anticipate range-bound trading, with S&P 500 support at 6,500 and resistance near 6,800. A dovish Fed and earnings beats could push indices higher, while shutdown escalation or hot inflation data might cap gains.

Conclusion

Last week’s modest advances reflect market confidence in policy support overriding near-term fiscal disruptions. For the week ahead, vigilance on Washington developments and data surprises is warranted, as they could dictate whether the bull run persists into Q4. Investors should monitor Fed rhetoric closely, as it remains the primary tailwind. Long-term, the market’s 2025 trajectory hinges on sustained earnings growth and inflation moderation.

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References

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The opinions expressed herein are those of the firm and are subject to change without notice. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of author, may differ from the views or opinions expressed by other areas of the firm, and are only for general informational purposes as of the date indicated.

Roan Capital Partners is a registered investment advisor located in the State of Tennessee. The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.