Market Roundup: October 20, 2025

Our pros' weekly take on the markets and economy

Despite a solid start to earnings season, markets remained choppy

Taking a closer look…

Third-quarter earnings season got off to a solid start. Many large banks delivered strong results that beat expectations.1 Healthy bank profits are typically consistent with positive economic growth.

Despite this positive start, reports of loan fraud losses at 2 regional banks sparked renewed market volatility. After a long period of strong gains, short-term market drops are normal when news like this arises. Over the coming days and weeks, analysts will assess if these incidents are isolated or part of a larger issue.2

With the US federal government remaining shut down, this earnings season may serve an expanded role. In the absence of government data, investors may look to corporate earnings reports for signals on the health and direction of US jobs, consumption, and inflation.

Despite the shutdown, Labor Department officials have resumed work on September’s inflation report and plan to release it on October 24th, 9 days later than scheduled. In the meantime, analysts have leveraged alternative pricing data which suggests inflation remains persistent.3

While inflation has been an important area of focus for the US Federal Reserve (Fed), it has also voiced concern regarding lackluster job growth. These concerns increase the likelihood of another Fed interest rate cut on October 29th. If the Fed does act, lower interest rates should help consumers by decreasing costs associated with car loans and credit card balances. Additionally, they should provide some borrowing relief for businesses.