U.S. stocks extended their gains in October, supported by easing trade tensions between the U.S. and China. A reduction in tariffs between the two nations lifted investor sentiment, while another round of solid corporate earnings—particularly from technology, AI-related companies, and the financial sector—reinforced confidence in the economy. A lower-than-expected inflation reading further bolstered markets, prompting the Federal Reserve to cut interest rates by another quarter point.
Expectations of the rate cut boosted both equities and bonds, though the Fed’s accompanying message was measured, noting that “a further reduction in the policy rate at the December meeting is not a foregone conclusion—far from it.” Bond prices moved higher during the month, supported by the expected policy action and a decline in longer-term yields as investors priced in a softer growth outlook heading into year-end.
Abroad, international equities advanced, led by strong performance in emerging markets where easing inflation and improving growth drove investor confidence. In developed markets, European stocks benefited from moderating price pressures, as Eurozone consumer inflation slowed to its lowest pace in more than two years.
Looking ahead, attention will remain on the Fed’s next steps amid limited economic data during the prolonged government shutdown. Markets are likely to stay sensitive to developments in monetary policy, trade relations, AI innovation, and inflation trends as the year draws to a close.
Source: Morningstar, Inc.
Disclosure: There is no guarantee that any investment strategy, including those described here, will be successful. Any investment or investment strategy can lose money. Past performance does not guarantee or predict future results. You should not assume that any discussion or information contained in this market commentary serves as the receipt of, or as a substitute for, personalized investment advice from Raffa Investment Advisers, LLC. This information was gathered from reliable sources, but we cannot guarantee accuracy. Indexes do not reflect the fees associated with actual investments and such fees would reduce the performance illustrated. Raffa actively leverages Artificial Intelligence and Large Language Models within our operations. The use of such technologies, focusing on the safeguard of non-public personal information, protecting of trade secrets, verification of information accuracy, and other pertinent compliance considerations, is outlined in Raffa’s Compliance Manual and acknowledged by Raffa staff. All viewpoints and final content created was reviewed and approved by the Raffa team to verify accuracy, perspective, and compliance with our marketing guidelines.
October 2025 Market Commentary & Outlook
Market Commentary
U.S. stocks extended their gains in October, supported by easing trade tensions between the U.S. and China. A reduction in tariffs between the two nations lifted investor sentiment, while another round of solid corporate earnings—particularly from technology, AI-related companies, and the financial sector—reinforced confidence in the economy. A lower-than-expected inflation reading further bolstered markets, prompting the Federal Reserve to cut interest rates by another quarter point.
Expectations of the rate cut boosted both equities and bonds, though the Fed’s accompanying message was measured, noting that “a further reduction in the policy rate at the December meeting is not a foregone conclusion—far from it.” Bond prices moved higher during the month, supported by the expected policy action and a decline in longer-term yields as investors priced in a softer growth outlook heading into year-end.
Abroad, international equities advanced, led by strong performance in emerging markets where easing inflation and improving growth drove investor confidence. In developed markets, European stocks benefited from moderating price pressures, as Eurozone consumer inflation slowed to its lowest pace in more than two years.
Looking ahead, attention will remain on the Fed’s next steps amid limited economic data during the prolonged government shutdown. Markets are likely to stay sensitive to developments in monetary policy, trade relations, AI innovation, and inflation trends as the year draws to a close.
Source: Morningstar, Inc.
Disclosure: There is no guarantee that any investment strategy, including those described here, will be successful. Any investment or investment strategy can lose money. Past performance does not guarantee or predict future results. You should not assume that any discussion or information contained in this market commentary serves as the receipt of, or as a substitute for, personalized investment advice from Raffa Investment Advisers, LLC. This information was gathered from reliable sources, but we cannot guarantee accuracy. Indexes do not reflect the fees associated with actual investments and such fees would reduce the performance illustrated. Raffa actively leverages Artificial Intelligence and Large Language Models within our operations. The use of such technologies, focusing on the safeguard of non-public personal information, protecting of trade secrets, verification of information accuracy, and other pertinent compliance considerations, is outlined in Raffa’s Compliance Manual and acknowledged by Raffa staff. All viewpoints and final content created was reviewed and approved by the Raffa team to verify accuracy, perspective, and compliance with our marketing guidelines.