Market Recap - Friday, October 24, 2025
Stocks Finish the Week with Record Highs on Cool CPI and Strong Earnings
It was a strong finish to the week for U.S. stocks. The Dow climbed 1.01%, the S&P 500 rose 0.79%, the Nasdaq gained 1.15%, and the Russell 2000 added 1.24%. All four major indexes notched fresh all-time highs, capping a week of solid gains as investors cheered better-than-expected inflation data and strong corporate earnings.
Big tech led the charge, with Alphabet (GOOGL) jumping on news of expanded AI partnerships. Banks, credit card companies, industrial stocks, and even utilities joined the rally. Retail-favorite and small-cap stocks continued to rebound. Meanwhile, energy and defensive sectors like food, insurance, and grocery lagged behind. Treasury yields were little changed, the dollar was flat, and gold and oil dipped slightly after Thursday’s bounce.
What Moved the Market
1. Inflation Cools More Than Expected
The September CPI came in slightly cooler than economists were expecting. Core CPI rose just 0.2% month-over-month, helping ease fears that sticky inflation might delay further Fed rate cuts. Disinflation in rent and shelter components added fuel to the idea that price pressures are finally easing. While the Fed is still expected to cut rates later this month, Treasury yields barely moved — suggesting that much of the optimism is already priced in.
2. Flash PMI Readings Show Economy Holding Up
Both manufacturing and services activity surprised to the upside in October, according to flash PMI data. That points to a still-healthy economic backdrop, especially as the services sector showed slowing price increases and stronger demand. The mixed consumer sentiment report didn’t dampen enthusiasm — investors focused more on the upside surprises.
3. Earnings Season Stays Hot
Strong earnings remained a major driver. Big standouts included Ford, which beat expectations and plans to boost truck production; Comfort Systems USA, which surged 19% on booming demand; and Alphabet, which gained on expanded use of its chips by AI firm Anthropic. Overall, nearly 84% of companies have beaten earnings estimates so far — well above the historical average. However, not every report was rosy: Deckers, Mohawk, and Booz Allen slipped on guidance concerns or disappointing numbers.
4. US-China Trade Talks Remain on Track (For Now)
The White House confirmed that President Trump and President Xi will meet next week in South Korea, boosting hopes for some easing in trade tensions. While there’s still risk of more tariffs or export restrictions, recent headlines suggest that cooler heads may be prevailing — for now.
Here’s Our Take
This week was a bullish trifecta: cooler inflation, stronger-than-expected economic data, and solid earnings. All of this helped push major indexes to new record highs, despite lingering trade risks, geopolitical tensions, and labor market headlines.
What stands out is the market’s ability to shake off bad news — Netflix’s stumble, more layoffs, and tariff threats — while zeroing in on core fundamentals that are still holding up. With earnings surprises running high and inflation easing, investor sentiment appears to have room to stay positive, at least in the near term.
That said, expectations are high heading into next week’s key events: the Fed’s rate decision, Mag 7 earnings (including Apple, Amazon, Microsoft, and Meta), and the Trump-Xi meeting. Markets will be looking for follow-through on all fronts. With positioning cleaner and retail interest still strong, a short-term pullback is possible, but the longer-term backdrop remains constructive — especially if the Fed signals an end to balance sheet runoff and the trade situation avoids a blow-up.
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