In the last two weeks, markets have grappled with the continued government shutdown, rising tariff tensions, and growing stress in regional banks, all against a backdrop of shifting Fed expectations. At the same time, innovation across major corporations and fragile geopolitical progress have underscored the economy’s mix of uncertainty and resilience. Let’s dive in!
- Gold Rally: Gold futures dropped slightly but are set for their largest weekly gain since 2020, rising nearly 7% amid trade tensions, Fed rate cut expectations, and credit concerns. Year-to-date, gold is up 59%, supported by central bank buying and record ETF inflows.
- Trade Tensions Update: Despite ongoing trade tensions and recent tariff threats between the US and China, key officials suggest a possible extension of the current tariff pause, with President Trump still planning to meet Chinese President Xi Jinping later this month at the APEC summit.
- Tax Brackets Update: The U.S. has seven federal tax brackets for 2025-2026 ranging from 10% to 37%. Your marginal tax rate applies only to the last dollar earned, while your effective tax rate reflects the overall percentage of income paid. See the updated brackets below:
- Regional Bank Concerns: Regional bank stocks fell sharply amid concerns over bad loans tied to recent bankruptcies, notably affecting Zions and Western Alliance. Despite isolated incidents, investor caution reflects broader worries about lending risks and private credit market opacity.
- Mortgage Rate Impact: Government shutdowns often lead to lower mortgage rates as investors move into Treasuries, pushing yields down. Historically, this results in a 0.125–0.25% decline, though ongoing FHA loan delays and broader housing market uncertainty can limit or delay the impact.
- Fed Rate Outlook: Fed Governor Chris Waller supports a 0.25% rate cut at this month’s meeting but advocates caution afterward, citing conflicting data between strong growth and a soft labor market. Future moves depend on economic and job market trends amid delayed inflation and jobs data.
- Walmart–OpenAI Integration: Walmart has partnered with OpenAI to enable shoppers to purchase items directly through ChatGPT, aiming to enhance the eCommerce experience with a personalized, AI-driven checkout feature. No launch date or financial terms have been disclosed.
- Gaza Ceasefire Progress: Israel and Hamas completed a key first step in the U.S.-brokered ceasefire by freeing hostages and prisoners, fostering hope for lasting peace despite ongoing challenges. This milestone reduces war urgency and allows for increased humanitarian aid to Gaza.
- JPMorgan Initiative: JPMorgan Chase announced a $1.5 trillion, 10-year initiative to finance and invest in critical U.S. industries, including supply chains, defense, energy, and frontier technologies, with up to $10 billion in direct equity investments to enhance national economic security and resiliency.
In the next two weeks, markets will focus on key economic reports, including third-quarter GDP and the Federal Reserve’s preferred inflation gauge, offering critical insight into growth, inflation, and policy direction amid the ongoing government shutdown. Geopolitically, attention will remain on ceasefire developments in the Middle East and continued U.S.–China trade negotiations as investors gauge their implications for global stability.
Footnotes
SFM Market Commentary: 10/24/25
In the last two weeks, markets have grappled with the continued government shutdown, rising tariff tensions, and growing stress in regional banks, all against a backdrop of shifting Fed expectations. At the same time, innovation across major corporations and fragile geopolitical progress have underscored the economy’s mix of uncertainty and resilience. Let’s dive in!
In the next two weeks, markets will focus on key economic reports, including third-quarter GDP and the Federal Reserve’s preferred inflation gauge, offering critical insight into growth, inflation, and policy direction amid the ongoing government shutdown. Geopolitically, attention will remain on ceasefire developments in the Middle East and continued U.S.–China trade negotiations as investors gauge their implications for global stability.
Footnotes