Weekly Market Sparks – October 6, 2025

Rusty Vanneman

— 3 min read

Talking Points for The Week That Was and The Week Ahead

Executive Summary Sparks

  • Last Week: Despite a U.S. government shutdown and the resulting “data blackout,” stocks advanced marking yet another week of resilience. The S&P 500 rose 1.1%, the Nasdaq 1.3%, and the Russell 2000 1.9%, all near record highs.
  • The Week Ahead: Markets await clarity on government funding and look to private data to fill the gap left by halted BLS reports. Fed officials’ commentary will take center stage ahead of the October 29 FOMC meeting, where another rate cut is expected.
  • Market Wisdom: Market disruptions come and go, but investor discipline—staying invested, diversified, and focused on long-term fundamentals—remains the steady path forward.

Sparks from the Week That Was

Market Performance:
Stocks held firm despite Washington gridlock. The S&P 500 ticked higher to while the Nasdaq slipped 0.3%, and the small-cap Russell 2000 led with a 0.7% gain. The S&P 500 has now posted 31 all-time highs year-to-date, up 35% since April lows and nearly 25% over the past 12 months. AI-driven growth and expectations for lower rates remain strong tailwinds.

Economic Data (or Lack Thereof):
The government shutdown paused major data releases, including September’s nonfarm payrolls report, but the ADP report filled the void—showing a 32,000 job loss versus expectations for gains. This reinforced the cooling labor narrative and cemented expectations for another Fed rate cut later this month.

Sentiment & Confidence:
The Conference Board’s Consumer Confidence Index declined, reflecting growing concern about the labor market and policy uncertainty. Still, equity sentiment remains robust, with investors viewing the shutdown as temporary and rate cuts as supportive.

Bond & Credit Markets:
Treasury yields declined, with the 10-year yield settling near 4.11%, as weaker employment data and uncertainty over fiscal policy spurred demand for safer assets. Municipal and investment-grade bonds outperformed, with strong demand and limited issuance.

Sector/Style Sparks:
Growth continued to lead, driven by AI-linked sectors and renewed enthusiasm for semiconductors. Small-cap and mid-cap stocks benefited from falling rates. Energy lagged, pressured by a 7% drop in crude oil as OPEC+ signaled higher output. Meanwhile, gold gained 3%, underscoring renewed hedging demand amid policy uncertainty.

Other Noteworthy Sparks:
AI investment remains staggering—projected to exceed $500 billion annually by 2027, rivaling the GDP of Singapore. Yet, as The Atlantic’s Derek Thompson noted, Americans currently spend only $12 billion on AI services—a gap that highlights the growing debate over whether today’s enthusiasm resembles past technology bubbles.

Sparks for the Week Ahead

  • Economic Data: With official data paused, markets will rely on private indicators such as ISM Services, Redbook sales, and ADP revisions for economic signals.
  • Fed & Policy: Expect market sensitivity to remarks from Fed Presidents Goolsbee and Logan, as policymakers balance cooling inflation with incomplete data.
  • Markets & Earnings: The Q3 earnings season begins later this month, with forecasts calling for double-digit profit growth—a key test for the market’s valuation strength.

Sparks of Market Wisdom

Periods like this remind investors that the market can thrive even amid noise, uncertainty, and missing data. Political theater and economic delays rarely derail long-term trends—but they do test investor temperament.
Now, as AI optimism soars and shutdown headlines dominate, it’s an important time to revisit timeless principles:

  • Stay invested – Missing just a few strong days can significantly reduce long-term returns. Investors need time in the market.
  • Stay diversified – Leadership rotates, and concentration risk is real.
  • Stay disciplined – Market clarity is rare, but patience and process create the edge.

Quote of the Week

“If you constantly put the client first and you deliver exceptional service, I think you can win in this game. … You have to earn the client’s trust.”
— Kim Arthur, Main Management LLC

Invest Well, Be Well.
Rusty Vanneman | rustysbridge.com
Listen to the Invest Well, Be Well podcast

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