Strong Q3 Results Boost Market Optimism:
Stocks rose last week thanks to strong third-quarter corporate earnings and mild inflation data, which helped soften concerns over ongoing trade tensions with China.
The S&P 500 Index gained 1.92%, while the Nasdaq Composite Index rose 2.31%. The Dow Jones Industrial Average advanced 2.20%. The MSCI EAFE Index, which tracks developed overseas stock markets, rose 1.24%.1,2
Source: Bloomberg Finance, L.P. (Performance data normalized 10/17/25 = 0)
S&P, Dow Set New Highs on Friday
Stocks rose out of the gate as optimism returned to markets. Strength in the tech sector—and whispers of an imminent end to the government shutdown—pushed all three market averages higher.3
But the strong start turned mixed as some pressure on megacap tech stocks pulled down the Nasdaq. But while tech stocks regrouped, attention shifted to the Dow Industrials, which hit a record intraday high of 47,000 and a record close.4
Sentiment soured midweek as weaker-than-expected earnings results from two megacap tech companies dragged down technology names. Markets came under further pressure following news that the administration was considering restrictions on U.S.-made software exported to China. The S&P, Dow, and Nasdaq all closed lower on Wednesday.5
But the mood brightened Thursday as more megacap tech companies announced strong Q3 results, and as the White House confirmed a scheduled meeting with China.
News on Friday that inflation rose more slowly than expected boosted all three averages. The S&P 500 and Dow Industrials hit all-time intraday and closing highs.6
Sources: U.S. Department of the Treasury, Board of Governors of the Federal Reserve System, Charles Schwab
Inflation Eases
The Consumer Price Index report, delayed due to the government shutdown, showed prices rose by 3.0% in September on an annualized basis, slightly cooler than the 3.1% forecast.
This news paved the way for the Fed to stick with its penciled-in rate cut at its two-day meeting, which ends on October 29.
In addition to the upbeat inflation news, Q3 corporate earnings–one of the key drivers of stock prices–have been beating expectations 80% of the time as of Friday.7
This Week: Key Economic Data
Source: Bloomberg Finance L.P.
This Week: Companies Reporting Earnings
Source: EarningsWhispers
Author
Gary Aiken
Chief Investment Officer
Concord Asset Management
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Footnotes and Sources
1WSJ.com, October 24, 2025
2Investing.com, October 24, 2025
3CNBC.com, October 20, 2025
4CNBC.com, October 21, 2025
5CNBC.com, October 22, 2025
6WSJ.com, October 24, 2025
7WSJ.com, October 24, 2025
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