Weekly Market Recap: Markets Hold Ground Amid Fed Caution and Global Trade Truce

Market Overview

Markets closed October on a strong note, extending the S&P 500’s winning streak to six months — its longest since 2021. Despite mixed big-tech earnings and policy uncertainty, major averages stayed positive through choppy trading.

The S&P 500 rose 0.72%, the Dow Jones gained 0.75%, and the NASDAQ jumped 2.25%, powered by upbeat results from Amazon and Apple. Small caps lagged, with the Russell 2000 falling 1.35%, highlighting investor preference for growth over value.

Technology (+3.0%) and Communication Services (+2.8%) led the week, while defensive sectors such as Consumer Staples (-3.9%) and Real Estate (-3.7%) underperformed. Year-to-date, the S&P 500 has gained 17.5%, fueled by steady earnings and cooling inflation.

Abroad, Europe eased after the ECB kept rates unchanged and signaled inflation concerns, while Japan’s Nikkei surged 6.3% following the Bank of Japan’s reaffirmation of accommodative policy.

Federal Reserve Insights & Economic Roundup

The Fed delivered a 0.25% rate cut, lowering the target range to 3.75%–4.00%, while announcing the end of quantitative tightening on December 1. Chair Powell maintained a cautious tone, emphasizing uncertainty amid divergent views within the FOMC.

Bond yields climbed, with the 2-year Treasury at 3.60% and the 10-year at 4.11%, as investors priced in fewer near-term cuts. The Fed will halt its balance sheet runoff of Treasuries but continue reducing mortgage-backed holdings to ease liquidity pressures.

Private labor data shows hiring momentum slowing, while inflation indicators remain contained. Powell described the economy as “flying with limited visibility,” signaling continued data dependence heading into 2026.

Commodities softened — oil declined on easing supply risks and gold slipped below $4,000/oz on a stronger dollar. The U.S. Dollar Index neared 100 as hawkish Fed rhetoric and yen weakness supported the greenback.

The Week Ahead

Monday: ISM Manufacturing Index, Construction Spending, Auto Sales

Tuesday: Trade Balance, JOLTS Jobs, Factory and Durable Goods Orders

Wednesday: ADP Employment Report, ISM Services Index, Mortgage Applications

Thursday: Jobless Claims, Productivity, Unit Labor Costs, Wholesale Inventories

Friday: Nonfarm Payrolls, Unemployment Rate, Consumer Sentiment