Hi All — Happy Veterans Day, first and foremost. To all our family, friends, and clients who have served: thank you, truly.

Now, let’s look ahead to the markets, which, as they say, are nothing if not forward-looking. That certainly proved true following the U.S. Federal Reserve’s latest interest rate decision. Fed Chair Jerome Powell on October 29 gave markets what they have been wanting for months: another 25-basis-point rate cut. Nevertheless, two of the three major indexes finished the day in the red. 

It didn’t help that the central banker poured cold water on investors’ widespread belief that another rate cut in 2025 is a done deal. Relaying the Federal Open Market Committee’s (FOMC) 10-2 vote in favor of the cut, Powell indicated that there were “strongly differing views” about how to proceed in December. 

But despite a tepid initial response to the decision, Powell’s comments didn’t stop markets from looking forward to the next one. Traders have still priced in a more than 60% likelihood of a rate cut when the FOMC reconvenes on December 17-18, per CME Group’s FedWatch. 

All major indexes are up since we last met, with the tech-heavy Nasdaq continuing to pace the pack, up 4.7% for October. It was helped higher by impressive earnings from Alphabet, although both Meta Platforms and Microsoft dipped, as Wall Street grew concerned that capital expenditures on artificial intelligence are getting out of hand. 

Still, no one can deny their prodigious revenue and earnings growth, or the fact that, zooming out of Big Tech, the earnings picture looks bright. Over two-thirds of S&P 500 companies have now reported Q3 earnings, with 83% beating analysts’ estimates. For the fourth quarter in a row, S&P 500 companies are seeing double-digit earnings growth on average. 

One note of caution, though. With traders denied federal economic data as the government shutdown stretches toward a record length, it’s easy to take an “out of sight, out of mind” approach when it comes to the state of the labor market. But the shutdown appears poised to send sooner than later. And an influx of data from a reopened Bureau of Labor Statistics could change the dynamic in a hurry.

OCTOBER MARKET PERFORMANCE

OCTOBER MARKET SUMMARY

• After a 10-day delay due to the shutdown, the Bureau of Labor Statistics released inflation data for September, showing that the Consumer Price Index rose 3% year-over-year. Core inflation, which excludes food and energy prices, also came in at 3%, a deceleration from August.

• We may not have the official jobs report for September or October, but data from research firm ADP showed that private payrolls increased by 42,000 in October, a rebound from September’s loss of more than 30,000.

• Consumer confidence fell for the third straight month in October, according to the University of Michigan’s sentiment index. However, the dip was nominal: the index slipped from 55.1 to 55. 

• The U.S. broke another oil production record, according to the Energy Information Administration (EIA), generating 13.6 million barrels per day in July. With OPEC+ announcing a slight production increase on Sunday, the EIA is now forecasting Brent crude to average $52 per barrel in 2026.

ONE BIG THING: TRUMP’S TRADE WAR TRUCE

You no doubt saw many recent headlines covering the one-year “trade war truce” between China and the U.S. But the devil is in the details.

On Thursday, October 30, Trump announced a deal after a “12 out of 10” meeting with Chinese leader Xi Jinping. China agreed to roll back all retaliatory tariffs that it had put in place this year, with the U.S. reducing tariffs against China from 57% to 47%. 

China also committed to buy 12 million metric tons of American soybeans by year-end, and to buy 25 million tons of soybeans each year through 2029. On top of that, the Asian nation will end controls placed on rare earths exports that America needs for computers, cars, phones, and a host of other devices. 

The market responded positively to the news, contributing to sharp monthly gains, particularly in the tech sector.

But, in the grand scheme of things, which side came out ahead?

The Atlantic Council’s International Economics Chair Josh Lipinsky pointed out that China is still shouldering higher tariff burdens than it faced when Trump returned to office. (21% at the start of 2025.) And China is still facing U.S. export controls on high-end chips, as Washington seeks to hobble its position in the global AI race.

Meanwhile, Marcus Noland, writing for the Peterson Institute for International Economics, noted that the still-sizeable 47% tariffs on China could stimulate U.S. manufacturing and bring economic benefits. 

However, other analysts noted China’s demonstration of sizable leverage against the U.S. By threatening the supply of rare earth metals and targeting U.S. farmers through its soybean imports, Beijing successfully forced Washington to the table. 

Given the frequency with which supposedly set-in-stone trade deals have fluctuated this year, it wouldn’t be outside the realm of possibility for it to happen again. 

FEATURED POST

Understanding the Wash Sale Rule and Its Tax Implications

The wash sale rule is an IRS rule that prohibits investors from claiming a tax loss from the sale of an investment if they repurchase the same or a “substantially identical” security within a 61-day window, starting from 30 days before the sale and ending 30 days after.

This rule applies to investments beyond just stocks, such as contracts and options that would result in the investor acquiring the same security. The purpose of the wash sale rule is to prevent taxpayers from collecting tax benefits while maintaining essentially the same portfolio of investments.

Here’s what you need to know →

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CLOSING REMARKS

Our team at Griffin Asset Management is here to help you make the most of the opportunities and challenges ahead.

If you have any questions or would like to discuss your financial strategy, please don’t hesitate to reach out.

We’re always available to set up a call and provide the personalized advice you need. Thank you for your continued trust and partnership.