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Stocks pushed higher last week, buoyed by strong third-quarter results posted by several money center banks.

The Standard & Poor’s 500 Index gained 1.70 percent, while the Nasdaq Composite Index rose 2.14 percent. The Dow Jones Industrial Average advanced 1.56 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, added 0.74 percent.^1,2

A Bumpy Week

Stocks rose to start the week after the White House shifted tone over the weekend on trade relations with China. Gains were broad-based—4 out of 5 stocks in the S&P 500 rose—with the index posting its best day since May 27.³

Overnight, the specter of a revived trade war with China reemerged after the country placed sanctions on U.S. subsidiaries of South Korean shipbuilders in an apparent effort to increase its control over global shipping. Stocks opened sharply lower the next morning, and then quickly staged an impressive rebound—helped by mostly positive quarterly earnings results from a handful of big money center banks.⁴

Stocks rose again midweek as better-than-expected Q3 corporate results from the biggest banks continued to roll in, overpowering negative sentiment around lingering trade concerns. As the week wrapped, bank stocks and all three broad market averages pushed through jitters to end in the green.^5,6,7

Bank Stock Paradox

While trade tensions with China dominated the attention during the week, some bank news also captured investor interest.

Last week, several money center banks reported expectation-beating Q3 results, underscoring the narrative of a healthy economy and robust consumer spending.

But there was a flip side to the banking sector: a smaller regional bank reported a $50 million credit loss from two commercial loans. The loss also hit larger banks with a stake in the loss. The news rattled the markets. For investors, it evoked memories of two regional bank failures in 2023, raised questions about whether this was a broader systemic issue, and put pressure on bank stocks, both big and small.⁸

Footnotes and Sources

1. ^{WSJ.com, October 17, 2025}
2. ^{Investing.com, October 17, 2025}
3. ^{CNBC.com, October 13, 2025}
4. ^{CNBC.com, October 14, 2025}
5. ^{WSJ.com, October 15, 2025}
6. ^{CNBC.com, October 16, 2025}
7. ^{CNBC.com, October 17, 2025}
8. ^{WSJ.com, October 17, 2025}

Stocks fell last week amid concerns about trade with China, following an unsteady rally to record highs over the first half of the week.

The Standard & Poor’s 500 Index fell 2.43 percent, while the Nasdaq Composite Index declined 2.53 percent. The Dow Jones Industrial Average slid 2.73 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, slipped 1.64 percent.^1,2

Stocks Set Highs Before Friday’s Drop

Stocks began the week mostly positive. However, Monday marked Day 6 of the government shutdown, and two of the three major averages powered through any bearish sentiment. The S&P 500 and the Nasdaq each advanced to record closes on fresh enthusiasm for mergers & acquisitions activity after the announcement of two deals. By contrast, the Dow fell slightly.^3,4

Stocks pushed higher midweek as investors looked past the Fed meeting minutes from September, which revealed somewhat divided opinions on interest rates. The S&P and Nasdaq both closed at record highs.⁴

On Friday, sentiment turned negative a little over an hour into the trading session after the White House announced a tariff increase on imported goods from China. The decline, led by chip manufacturers, erased the week’s gains. It was the largest single-day decline for stocks since April.^5,6,7

China In Focus

Meanwhile, focus turned to new export controls that China imposed on so-called rare earth metals—key ingredients for AI-powered microchips and vital resources for the defense industry. Investor concern centered mostly around AI chip companies, which have exposure to China both as customers and in terms of manufacturing.⁸

The White House threatened to cancel its upcoming meeting with the Chinese president over the dispute. China controls approximately 70 percent of the global supply of rare earth metals, meaning a policy change can impact markets.⁸

Separately, the government shutdown entered its second week. Shutdowns typically don’t heavily impact markets, but the uncertainty continues to hang over trading.⁹

Footnotes and Sources

1. ^{WSJ.com, October 10, 2025}
2. ^{Investing.com, October 10, 2025}
3. ^{CNBC.com, October 6, 2025}
4. ^{CNBC.com, October 8, 2025}
5. ^{CNBC.com, October 9, 2025}
6. ^{WSJ.com, October 10, 2025}
7. ^{WSJ.com, October 10, 2025}
8. ^{WSJ.com, October 10, 2025}
9. ^{WSJ.com, October 9, 2025}

Stocks rose last week, looking past the government shutdown and apparently discounting any impact it may have on the economy.

The Standard & Poor’s 500 Index moved up 1.08 percent, while the Nasdaq Composite Index rose 1.32 percent. The Dow Jones Industrial Average advanced 1.10 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained 2.53 percent.^1,2

Shutdown Talk

The S&P and Nasdaq rose out of the gate Monday morning despite the threat of a possible government shutdown hanging over investor sentiment.³

As the midnight deadline approached for Congress to pass a continuing resolution that would temporarily fund the federal government, the prospect of a shutdown dominated market sentiment. The White House discussed permanent layoffs of some federal workers, stoking fears of further slowing an already sluggish labor market.⁴

Stocks initially fell on news of the shutdown but recovered by midday, driven by growing investor expectations that the shutdown would be short-lived. The S&P closed above 6700 for the first time.⁵

Momentum tempered after Treasury Secretary Scott Bessent suggested gross domestic product (GDP) may take a hit due to the shutdown, but all three averages recovered and closed at record highs.⁶

Stocks were mixed on Friday after the Senate failed to pass dueling funding bills that would have prevented the shutdown from entering its second week.⁷

Jobs Report Delayed

Investors have looked past—but continue to be jittery about—the government shutdown and its potential impact on an otherwise resilient economy, which is experiencing a hiring slowdown.

One of the first impacts felt from the shutdown was the Bureau of Labor Statistics’ monthly employment report, scheduled for release on Friday, but delayed until the government reopens for business. However, ADP’s monthly report, released on Wednesday, showed that corporate employers shed 32,000 jobs in September, below the forecast of 45,000 new jobs.⁸

Footnotes and Sources

1. ^{WSJ.com, October 3, 2025}
2. ^{Investing.com, October 3, 2025}
3. ^{CNBC.com, September 29, 2025}
4. ^{CNBC.com, September 30, 2025}
5. ^{WSJ.com, October 1, 2025}
6. ^{CNBC.com, October 2, 2025}
7. ^{CNBC.com, October 3, 2025}
8. ^{WSJ.com, October 1, 2025}

Stocks fell last week, buffeted by concerns about stock price valuations and a possible government shutdown.

The Standard & Poor’s 500 Index declined 0.31 percent, while the Nasdaq Composite Index lost 0.65 percent. The Dow Jones Industrial Average slipped 0.15 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, fell 0.34 percent.^1,2

Stocks Under Pressure

The S&P 500 and the small-cap index Russell 2000 hit all-time intraday highs on Tuesday before trending lower. The decline turned into a three-day retreat for stocks.³

Adding to the selling pressure was Federal Reserve Chair Powell, who made cautious comments on stock price valuations on Tuesday. Investors were also watching a possible government shutdown as Congressional budget deliberations appeared to stall.^4,5

It was the first time in six months that all three averages (Dow, S&P 500, and Nasdaq) declined over three consecutive sessions.⁶

Stocks rebounded Friday after the Personal Consumption & Expenditures (PCE) Index—the Fed’s preferred inflation measure—was in line with expectations. The news appeared to reassure investors that the Fed would move ahead with its “penciled-in” rate adjustments for the remainder of this year.⁷

Economic Snapshot

A flurry of updated economic data hit last week. Here are the key takeaways:

Overall, the indicators suggested a strong economy. The final estimate of Q2 gross domestic product was 3.8 percent, stronger than previous reports. Durable goods orders rebounded in August, driven by a surge in aircraft orders. And weekly jobless claims fell.⁸

The fact that the PCE was in line with estimates—core inflation of 2.9 percent year over year—was welcomed news for investors. The report seemed to support Fed Chair Powell’s position, who on Tuesday suggested that weakness in the labor market outweighed concerns about stubborn inflation.⁹

Footnotes and Sources

1. ^{WSJ.com, September 26, 2025}
2. ^{Investing.com, September 26, 2025}  
3. ^{CNBC.com, September 22, 2025}
4. ^{CNBC.com, September 23, 2025}
5. ^{CNBC.com, September 24, 2025}
6. ^{WSJ.com, September 25, 2025}
7. ^{CNBC.com, September 24, 2025}
8. ^{WSJ.com, September 25, 2025}
9. ^{CNBC.com, September 24, 2025}

Stocks posted solid gains last week, propelled by the Fed’s decision to cut short-term interest rates.

The Standard & Poor’s 500 Index rose 1.22 percent, while the Nasdaq Composite Index climbed 2.21 percent. The Dow Jones Industrial Average advanced 1.05 percent. By contrast, the MSCI EAFE Index, which tracks developed overseas stock markets, fell 0.27 percent.^1,2

Third Week of Gains for S&P, Nasdaq

Stocks advanced to start the week following the president’s positive comments on trade talks with China. The news helped push the S&P 500 to close above 6600 for the first time.³

After the Fed announced on Wednesday that it was cutting short-term interest rates by a quarter percentage point, all three major averages fell before rising again in a choppy, mixed trading session.^4,5

After digesting the Fed decision, all three major averages posted solid gains on Thursday, paced by tech names. But small caps stole the day’s headlines, with the Russell 2000 Index gaining more than 2 percent and hitting an intraday record high. Smaller companies tend to disproportionately benefit when the Fed lowers interest rates, given their greater reliance on outside funding than larger companies.⁶

The post-cut momentum continued into Friday; this was the second consecutive week of gains for the Dow Industrials, and the third straight week for the Nasdaq and S&P 500.⁷

Following the Fed

The Federal Reserve decision brought the Federal Funds Rate down to a 4-4.25 percent target range—its lowest level in three years.

While widely anticipated, the real news about the cut was in the finer points made by Fed Chair Jerome Powell in the post-meeting press conference. He said the move was essentially a “risk management” cut. This concept confused investors a bit, resulting in scattered markets.

Powell also said two more rate adjustments are “penciled in” for this year. He suggested another rate change could occur in 2026, followed by another in 2027.⁸

Footnotes and Sources

1. ^{WSJ.com, September 19, 2025}
2. ^{Investing.com, September 19, 2025}  
3. ^{CNBC.com, September 15, 2025}
4. ^{WSJ.com, September 16, 2025}
5. ^{WSJ.com, September 17, 2025}
6. ^{CNBC.com, September 18, 2025}
7. ^{CNBC.com, September 19, 2025}
8. ^{CNBC.com, September 17, 2025}