Anna's Markets Recap

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Saturday, 5:36 AM

October 4, 2025

Good morning news friend! Here is a quick recap of what happened in the markets this week. 📰🌟

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Follow the Real Smart Money: Inside Congress's Portfolio

Forget the talking heads on TV. If you want to know where the market might be heading, watch what Congress does with its own money.

Last week, their actions were telling.

A senator on the Health Committee made a big purchase in a robotic surgery firm, while another key senator started selling his shares in NVIDIA, Apple, and Microsoft.

And the Senate's top budget chairman? He just moved up to $100,000 into a U.S. Treasury bill—a classic safe-haven play.

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Get the full breakdown in our latest report.

What Moved Markets Last Week

The U.S. equity market navigated a week of significant uncertainty, defined by a government shutdown and the resulting suspension of key economic data. The S&P 500 and Nasdaq Composite began the week with a three-day slide as investors weighed high valuations against the shutdown, which commenced on October 1. However, markets staged a convincing rebound to finish the week with net gains. This recovery was not fueled by economic strength but by rising investor expectations of imminent interest rate cuts from the Federal Reserve. Commentary from Fed officials, coupled with the week's instability, solidified bets on a more dovish monetary policy. The 10-year Treasury yield fluctuated before settling near 4.11%, reflecting the push-and-pull between a historically resilient economy and a central bank that appears poised to act.

The shutdown's most critical impact was the creation of a "data blackout," immediately halting releases from the Bureau of Labor Statistics and other agencies. The indefinite delay of the September jobs report, the market's most-watched monthly metric, has left both investors and the Federal Reserve flying blind. Without official employment and inflation data, policymakers must rely on less comprehensive private-sector reports, amplifying the significance of every statement from Fed officials. This information vacuum contributed to market volatility and gave the Fed political cover to adopt a more accommodative stance, citing uncertainty. The week’s pre-shutdown data only added to the confusion. While the final Q2 GDP estimate was revised upward to a robust 3.8% annualized rate, the September Consumer Confidence Index fell sharply to its lowest level since April, with consumers citing inflation and a weakening job market as primary concerns. This divergence between strong backward-looking data and weak forward-looking sentiment encapsulates the Fed's current dilemma.

Gold served as a clear barometer of the week's anxiety, rallying toward record highs. Futures advanced 1.2% on Friday to close at $3,915 an ounce. The government shutdown and associated uncertainty drove investor demand for the precious metal's traditional safe-haven qualities. The rally was amplified by the market's conviction that the Federal Reserve will soon cut interest rates. Lower rates decrease the opportunity cost of holding non-yielding assets like gold, making it more attractive. A weaker U.S. dollar also provided a tailwind, making gold cheaper for buyers using other currencies.

The government went dark, but the market didn't stop. Get the full, unfiltered breakdown.

Tech and Growth

The technology sector was driven by major strategic developments in artificial intelligence. NVIDIA's stock rallied after it announced a landmark partnership with OpenAI to deploy 10 gigawatts of its systems to train next-generation AI models. As part of the deal, NVIDIA intends to invest up to $100 billion in OpenAI as the new infrastructure comes online, reinforcing its role as the indispensable hardware provider for the AI revolution.

Tesla shares rose after reporting record Q3 vehicle deliveries of 497,099, well ahead of estimates. However, the surge was largely attributed to a "pull-forward" of U.S. demand as buyers rushed to claim a $7,500 federal EV tax credit that expired on September 30. This dynamic creates a potential "demand vacuum" for Q4 and raises questions about the sustainability of the growth, with the company now facing pressure to stimulate new demand without eroding margins.

In enterprise software, Salesforce faced headwinds after a ransomware group claimed to have stolen 1.5 billion records from its customers. The attack was not a direct breach of Salesforce's platform but a compromise of OAuth tokens from a third-party AI chatbot that integrates with its instances. The event highlights the growing security risks associated with interconnected AI ecosystems. Elsewhere, Amazon settled with the FTC for $2.5 billion over deceptive Prime subscription practices, and Alphabet continued its strong performance, supported by resilient growth in its core Search business.

Here's what the headlines missed.

Banks and Financials

Financials contended with the market's shifting rate expectations. The decline in Treasury yields weighed on large banks, as lower long-term rates tend to compress net interest margins—the spread between what banks earn on assets and pay on deposits. This dynamic pressured shares of JPMorgan Chase and Bank of America, which underperformed the broader market's late-week rally. In a move to signal confidence, JPMorgan’s board announced an increased quarterly dividend.

Berkshire Hathaway made a significant capital allocation move, announcing the acquisition of OxyChem, the chemical subsidiary of Occidental Petroleum, for $9.7 billion in cash. This classic Warren Buffett transaction deploys a portion of Berkshire’s massive cash holdings into a stable, cash-generating business that produces essential commodity chemicals, signaling a cautious outlook on public market valuations. Payment processors Visa and Mastercard showed strength amid resilient consumer spending data. Mastercard announced an expansion of its partnership with Corpay, extending its cross-border payment services to 22 new markets to capture a larger share of the lucrative global business-to-business payments sector.

Read our full analysis to see what's coming next.

Consumer Goods and Healthcare

The healthcare sector saw strong performance, led by major pharmaceutical firms. Shares of Eli Lilly and AbbVie surged as investors rewarded both companies for making significant new investments in U.S.-based manufacturing. The market interpreted these capital expenditures as a strategic move to de-risk supply chains and hedge against potential U.S. tariffs on imported pharmaceuticals, which could lead to a long-term valuation premium. Johnson & Johnson shares also climbed after receiving FDA approval for its drug TREMFYA® to treat pediatric psoriasis.

In the consumer space, a cautious sentiment prevailed. Costco's stock declined after its Q4 earnings report revealed that same-store sales growth fell slightly below forecasts. Management cited a "choppy consumer landscape" and announced a strategic pivot to reduce inventory of discretionary items and focus on its value-oriented Kirkland private-label brand. This pullback from a retailer with a typically resilient customer base serves as a potential warning sign for the broader retail sector heading into the holiday season.

Dive deep here.

Energy and Industrials

The energy and industrial sectors faced headwinds from mounting economic uncertainty. Energy was the S&P 500's worst-performing sector to start the week, with shares of majors like Exxon Mobil falling on concerns that a U.S. economic slowdown would dampen global demand for oil and gas.

Home improvement giant Home Depot saw its stock decline as it navigates a bifurcated housing market. While new data shows the construction of single-family homes has slowed to a four-year low, the building of multifamily units is surging. This trend presents a mixed outlook, as a slowdown in single-family construction hurts sales of big-ticket items, while the multifamily boom supports its professional (Pro) business. However, a long-term shift toward a "renter economy" could create a structural headwind for the company's high-margin do-it-yourself (DIY) segment.

Did you know we also write in-depth deep dives? They are long, packed with insights, and have received rave reviews. If you’re up for a detailed, action-packed read, check them out:

• The Gut Brain Axis

• The Healthcare Hammer

• The Resilient Retirement

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Baked with love,

Anna Eisenberg ❤️