Market Update: October 14, 2025

Markets are shifting from a macro focus to a micro one. After months dominated by headlines on inflation, policy, and interest rates, the start of earnings season will bring attention back to company fundamentals. Expectations and optimism about artificial intelligence are important, but the key question is whether they translate into stronger profits. The same applies to tariffs and cost pressures.

Weekly Market Brief

Global equities gained last week, led by international markets. Bonds also rose as expectations for Federal Reserve easing and the ongoing government shutdown kept yields under pressure. Commodities were mixed, with strength in metals and weakness in energy.

Foreign markets outperformed U.S. stocks, helped by a weaker dollar and a more balanced tone from the European Central Bank. Emerging markets moved higher on continued strength in global technology trends. In the U.S., sector performance was mixed, with health care and technology leading while energy lagged.

Bonds delivered positive returns across most sectors. U.S. Treasuries and investment-grade corporates led the way, while high yield and floating-rate loans gained slightly. International bonds benefited from falling yields and a weaker dollar.

Theme of the Week

Earnings season will test how much of the market’s optimism is justified. Policy shifts and technological innovation have captured investor attention, but profits will determine whether these themes are sustainable. Profits, not policy or headlines, will determine the outcome.

Notes from the Optimizer

When attention moves from macro to micro, differences between companies begin to widen. This environment often rewards active management, especially in areas where markets are less efficient. Greater dispersion creates opportunities for skilled managers.

The information above has been obtained from sources considered reliable, but no representation is made as to its completeness, accuracy or timeliness.  All information and opinions expressed are subject to change without notice.  Information provided in this report is not intended to be, and should not be construed as, investment, legal or tax advice; and does not constitute an offer, or a solicitation of any offer, to buy or sell any security, investment or other product.