đź“Š Weekly Market Recap
S&P 500 return Year-to-date were approximately 15.99%
S&P 500 3 month return were approximately 7.62%
S&P 500 return over the past month were approximately 1.59%
S&P 500 return over the past 7 days were approximately 1.24%
This Week in the Markets- 3 Things to know
- Deal or No Deal: Markets were jolted lower even after Donald Trump and Xi Jinping reached a tentative trade framework being dubbed the “Deal or No Deal” moment. The agreement includes limited tariff rollbacks on select Chinese goods in exchange for increased U.S. agricultural exports and partial easing of tech export restrictions. It’s the most meaningful step toward cooperation since the escalation of trade tensions earlier this year. While not a full resolution, the move signals a shift toward dialogue over confrontation. Officials described the talks as “cautiously productive,” though both sides admitted that deeper structural issues remain unsolved. Investors welcomed the news as a relief rally, particularly for global manufacturing, semiconductors, and commodities. Economists expect the truce to marginally ease inflation by lowering import costs for U.S. producers.
- The Fed Cut: A House Divided– On Wednesday, the Federal Reserve voted to cut rates by 25 basis points, bringing the federal funds range to 3.75–4.00 percent. The decision was widely expected but revealed clear divisions among policymakers about the pace and direction of future moves. Some Fed officials advocated for a larger 50-point cut to stimulate growth amid slowing indicators. Others argued that inflation remains too high to justify a deeper move, fearing a premature pivot. Chair Jerome Powell emphasized that the Fed remains data-driven and will move cautiously into year-end. Inflation has cooled substantially from its 2022 peaks but remains stubborn in areas like shelter, medical care, and services. The labor market shows the first real signs of fatigue, with hiring slowing and wage growth normalizing. Markets initially celebrated the cut, but enthusiasm faded as Powell signaled a cautious path ahead.
- Magnificent earnings or not?– As of today, the Magnificent 7- Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia, and Tesla, have delivered a mix of strong and shaky results, capturing both the strength and fatigue of the mega-cap era. Nvidia once again dominated headlines with record data center revenue, fueled by relentless AI demand and enterprise adoption. Microsoft’s Azure growth slightly outpaced expectations, keeping it near the top of the cloud race. Apple reported stable but a bit lower than expected iPhone and services sales, proving that brand loyalty remains strong even in a slower global economy. Amazon continued to benefit from cost-cutting and AWS stabilization, signaling improving margins heading into the holidays. However, Meta’s sharp post-earnings decline reminded investors that high expectations come with steep consequences. Despite beating revenue and profit forecasts, Meta’s cautious ad outlook and increased AI spending triggered a major selloff as well as a tax charge. The broader message was clear: the tech giants remain profitable, but investor patience is wearing thin on inflated valuations.
The Long Road Ahead
As the year winds down, the U.S. economy is slowly finding its footing. Growth isn’t roaring, but it’s steady and that’s exactly what the Fed has been trying to engineer: a soft landing instead of a crash. Consumer spending remains the backbone, inflation is finally easing, and the labor market, while cooling, is still healthy enough to support confidence. The October rate cut gave the economy a little extra room to breathe, especially for borrowers and small businesses that had been squeezed by high credit costs. Still, higher rates have left their mark housing is sluggish, some companies are delaying investment, and credit conditions remain tight. Inflation has been trending in the right direction, inching closer to the Fed’s 2% goal, though sticky prices in services and rent suggest the road to stability is not fully paved yet.
And yes, every week we talk about the Fed. It’s practically a national hobby at this point. The split between policymakers over whether to cut 25 or 50 basis points shows how delicate this balancing act has become. Some officials worry about cutting too fast and reigniting inflation, while others think holding back could choke off growth just as momentum is returning. Powell’s message has been clear: this is a “data-dependent” game, not one guided by hope. The market seems to get that now, reacting less to each speech and more to actual numbers. The next few months will be about confirming that inflation’s decline is real, and that economic growth can stand on its own two feet without constant central bank support.
Meanwhile, the market’s eyes are on the big picture. The S&P sitting just below the 7,000 mark isn’t as far-fetched as it sounds, we’re closer than people think. But to get there and stay there, the economy needs to stabilize further. We’ll need consistent GDP growth, real wage gains, and improving productivity to justify valuations. There’s still plenty of room that could benefit from a trade thaw, to quality dividend stocks offering shelter in volatility. The setup for the final stretch of 2025 is a mix of caution and opportunity. The fundamentals are improving, but we’re not at the finish line yet. If the Fed threads the needle and growth firms up, that 7K target might just be within reach and this time, it could actually stick the landing.
S&P 500 SECTOR SNAPSHOT- Past Week
We’re just around the corner from November, which is when we typically send out engagement letters for tax season.  If you’re a current client you can expect to hear from us in the next few weeks.  If you’re not (yet) a client and need help with taxes just let us know.