October 2025
Summary
Nothing could frighten investors in October, as markets finished the month in the green across the board. In the U.S., a prolonged government shutdown was met with a shrug. Trade deals in Asia calmed global markets in the face of the ever-looming tariff specter. The Fed finished the month by reducing interest rates another 25 basis points.
Equities
Global stocks gained in October, padding gaudy returns for 2025. Emerging markets led the group, rising 4.2% during the month to push year-to-date returns north of 30%. U.S. markets bested developed international equities; large cap stocks returned 2.2% in the face of a government shutdown that seems to become more entrenched with each passing day. Small caps continued to recover from a tough start to the year, finishing 1.8% higher for October.
Fixed Income
The Fed cut rates for a second consecutive month, pushing through a 0.25% reduction to the policy rate in the final week of October, albeit with less dovish commentary. Rates moved lower during the month, and high-grade fixed income outperformed more credit sensitive debt. Duration paid as the 10-year yield fell for most of October before rebounding to finish 5 basis points lower month-over-month.
1 – Russell 1000, 2 – Russell 2000, 3 – MSCI EAFE, 4 – MSCI Emerging Markets, 5 – Bloomberg US Agg, 6 – Bloomberg US Long Gov/Credit
7 – Bloomberg US Corporate High Yield, 8 – Bloomberg Gold Subindex, 9 – Bloomberg Commodity
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