Weekly Market Update – October 10, 2025

Quick Takes

• Stocks saw their largest daily decline since the April 10 Liberation Day on Friday after President Trump threatened “a massive increase of tariffs on Chinese products” in response to China’s proposed new export controls on rare earths minerals.
• The S&P 500 finished Friday down -2.7%, the Russell 2000 fell -3.0%, and the Nasdaq Composite dropped -3.6%. For the week, the S&P, Russell, and Nasdaq finished down -2.4%, -3.3%, and -2.5%, respectively, but all retained healthy 2025 gains.
• For a second straight week, WTI oil prices saw a material decline, falling -3.3% after the prior week’s -7.4% drop. WTI oil closed at $59 per barrel, the lowest levels since early May. Meanwhile, the US Dollar was up +1.3% last week, its third week of gains in the last four. 

Source: Bloomberg. Data as of October 10, 2025.
Price Returns for Equity, Total Returns for Bonds.
* The term basis points (bps) refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 0.01%. Bond prices and bond yields are inversely related. As the price of a bond goes up, the yield decreases.

Stocks and Bond Yields Tumble on Renewed Tariff Trouble

Stocks spent much of the week in positive territory, as investors continued to shrug off any concerns regarding the government shutdown. Enthusiasm for firms that could benefit from artificial intelligence (AI) remained high as several new deal announcements, such as a strategic partnership between Advanced Micro Devices and OpenAI, began the week on Monday. With little other news coming in on the economic or earnings front, there wasn’t a whole lot to deter buyers. By Wednesday’s close, the S&P 500 Index and Nasdaq Composite Index both closed at new all-time highs (the small cap Russell 2000 Index was just below its latest all-time high set on Monday). Thursday was mixed, with the S&P 500 and Nasdaq hitting new intraday record highs, but then tapered off, and most stock indices ended down fractionally. 

But on Friday, the news cycle and the direction of stocks took a dramatic turn. Late Friday morning, President Trump posted on social media that he was considering “a massive increase of tariffs on Chinese products” in response to China’s proposed new export controls on rare earths minerals. The president suggested he may cancel a planned meeting with Chinese President Xi Jinping in South Korea at the end of the month. US equities fell sharply on the headlines and continued lower through the afternoon. The selloff was steep enough to more than wipe out weekly gains by the major indices. The S&P finished the day down -2.7%, the Russell fell -3.0%, and the Nasdaq dropped -3.6%. It was the worst daily decline of the US stock indices since the April 10 Liberation Day. For the week the S&P, Russell, and Nasdaq finished down -2.4%, -3.3% and -2.5% respectively. Even after Friday’s dramatic declines, the indices all hold healthy 2025 gains led by the Nasdaq’s +15.0%, followed by the S&P’s +11.4%, and the Russell’s +7.4%. 

Shortly after Friday’s close, Trump provided some details around the morning’s posts, writing: “Starting November 1st, 2025 (or sooner, depending on any further actions or changes taken by China), the United States of America will impose a Tariff of 100% on China, over and above any Tariff that they are currently paying.”  Markets will anxiously await whether the US and China can find ways to work toward a truce as they have in the past. 

With stocks sinking on the tariff turbulence, US Treasuries prices jumped higher as investors sought safe havens. The 10-year yield ended the week down -9 basis points (bps) at 4.03% after a -6 bps drop the prior week. The 2-year Treasury yield fell -7 bps for a second straight week to end at 3.50%. Bond prices and yields move in opposite directions, and the Bloomberg U.S. Aggregate Bond Index returned +0.3% for the week following a +0.5% gain the prior week. US Bond markets will be closed on Monday for observance of Columbus Day. It was a different story for non-US bonds last week. The Bloomberg Global Aggregate ex U.S. Bond Index (non-U.S. bonds) returned -1.2% after a +0.7% gain the prior week. Non-US bonds were hampered by the US Dollar Index’s +1.3% rise last week, its third week of gains in the last four.  In addition, the selloff reflected a broader repricing of fiscal, inflationary, and policy risks amid reduced expectations for aggressive global rate cuts. 

For a second straight week, WTI crude oil saw a material decline, falling -3.3% after the prior week’s -7.4% drop. Brent crude settled at around $63 per barrel and West Texas Intermediate (WTI) at $59, the lowest levels since early May. Friday’s tariff news rattled expectations for demand on concerns the renewed US-China tariff rift will negatively impact broader economic activity. The news earlier last week of progress toward an Israel-Gaza/Hamas ceasefire reduced the geopolitical risk premium baked into prices. The previous week, the OPEC+ group of major oil-producing nations signaled that it would boost production in November.

Chart of the Week

Outstanding U.S. Consumer Credit increased by just +$363 million in August, far below expectations for a +$14.0 billion increase, and sharply down from $18.053 billion the prior month (revised up from the initially reported +$16.01 billion). That amounts to just a +0.1% annual growth rate, down from the +0.3% annualized growth rate the prior month. Growth for revolving credit, such as credit cards, fell -5.4% for the month, only the fifth monthly decline since May 2021, and the largest monthly decline since November 2024. Nonrevolving credit, which tends to be much less volatile than revolving credit and includes auto as well as school loans, rose at a +2.0% rate following the prior month’s +2.2% increase. The data from the Federal Reserve is not adjusted for inflation and does not include mortgage loans, which is the largest category of household debt. The key takeaway is that August represented a significant deceleration in consumer credit from July’s upwardly revised increase. The decline was driven by the largest drop in revolving credit— mainly credit cards — but revolving credit may pick up in the coming months as interest rates decline.

Consumer Credit Unexpectedly Drops in August 

The Conference Board’s Consumer Confidence Index

Source: Federal Reserve, Bloomberg.

The Week Ahead

Bond markets will be closed on Monday for observance of Columbus Day. That, plus the government shutdown entering its third week, will make what would otherwise have been a pickup in economic data a relatively slow week. The Consumer Price Index (CPI), originally scheduled for release on October 15, would have been the main focus, but that has now been pushed back to October 24, with the Bureau of Labor Statistics recalling some employees to collect data for the all-important report. The Social Security Administration needs inflation data to set its annual cost-of-living adjustment (COLA). The Weekly Jobless Claims, Retail Sales, Producer Price Index (PPI), Housing Starts, Import/Export Prices, and Industrial Production reports are not expected to be delivered this week. That leaves just five reports for the week: Small Business Optimism, weekly MBA Mortgage Applications, Empire (NY State) Manufacturing, Philly Fed Manufacturing, and the NAHB Housing Market Index.

Absent much of the economic data, earnings season may garner more attention. The Financial sector makes up most S&P 500 companies reporting earnings this week. Goldman Sachs, JPMorgan Chase and Wells Fargo announce results on Tuesday, followed by Bank of America and Morgan Stanley on Wednesday. Charles Schwab releases earnings on Thursday, and American Express closes out the week for financials on Friday. In addition, two prominent foreign Technology sector companies at the heart of the Artificial Intelligence (AI) ecosystem will also provide results, with ASML on Wednesday, and Taiwan Semiconductor on Thursday.

*Data subject to delay if government shutdown continues

Did You Know?

EVERYBODY’S DOING IT – Over the last 12 months, global central banks have cut rates 168 times. Since 2002, the only other 12-month periods where global banks were cutting rates even more aggressively were in June 2020 (196 cuts) and October 2009 (249 cuts). (Source: Bank of America)

THE MOST VOLATILE TIME OF THE YEAR – While October has historically been positive, with the S&P 500 averaging a gain of +0.9% during the month for the last 75+ years, it has also been the most volatile month of the year, with an average high-low spread of 8.3% — 1.5 percentage points higher than the next closest month (January). (Source: Bespoke)

HIDDEN TAX BURDEN – Americans will spend a total of 7.1 billion hours complying with IRS tax filing and reporting requirements in 2025. That’s the equivalent of 3.4 million full-time workers and nearly $400 billion in lost productivity. Americans spend nearly $150 billion in out-of-pocket costs annually to comply with the tax code. (Source: Tax Foundation)

This Week in History

FIRST INDIVIDUAL RETIREMENT PLAN – On October 10, 1962, the Self-Employed Individual Retirement Tax Act became U.S. law, creating the first retirement account that an individual can control and determine on their own. (Source: The Wall Street Journal)

Economic Review

• Due to the current partial US government shutdown, the release of the following reports have been delayed or postponed: 
• August Trade Balance (Bureau of Economic Analysis)
• Weekly Initial Jobless Claims and Continuing Claims (Department of Labor)
• August Wholesale Inventories (Census Bureau)
• September Federal Budget Balance (US Treasury)
• The preliminary reading of the September University of Michigan Consumer Sentiment Index ticked down to 55.0 from 55.1 the prior month, but that beat expectations for a drop to 54.0. In the same period a year ago, the index stood at 70.5. The Current Economic Conditions component rose to 61.0 from 60.4 the prior month and compares to 64.9 a year ago. The Consumer Expectations component was down to 51.2 from 51.7 the prior month and compares 74.1 a year ago. One-year inflation expectations declined to 4.6% from 4.7% the prior month. Five-year inflation expectations were unchanged at 3.7% from the prior month. The bottom line is that consumers are not optimistic about the prospect of finding new jobs or any meaningful improvement on the inflation front, which could impact consumption activity.


Weekly MBA Mortgage Applications slumped -4.7% for the week ending October 3, after diving -12.7% the prior week. The Purchase Index was down -1.2% after slipping -1.0% the prior week. The Refinance Index fell -7.7% after sinking -20.6% the prior week. The average 30-Year Mortgage Rate dipped to 6.43% from 6.46% the prior week.

Asset Class Performance

Source: Bloomberg.
Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange-traded funds recommended by The Retirement Planning Group. The performance of those funds may be substantially different from the performance of the broad asset classes and to proxy ETFs represented here. US Bonds (iShares Core US Aggregate Bond ETF); High‐Yield Bond (iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (Vanguard Total International Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 Value ETF); Mid Growth (iShares Russell Mid-Cap Growth ETF); Mid Value (iShares Russell Mid-Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares US Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by 24% US Bonds, 10% International Bonds, 6% High Yield Bonds, 13.8% Large Growth, 13.8% Large Value, 3.6% Mid Growth, 3.6% Mid Value, 1.2% Small Growth, 1.2% Small Value, 16.8% International Stock, 4.2% Emerging Markets, 1.8% Real Estate.
* The term basis points (bps) refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 0.01%. Bond prices and bond yields are inversely related. As the price of a bond goes up, the yield decreases.