The Market Down & Dirty

October 20, 2025                                                                 

The Data

Equities closed out the week higher despite multiple negative headlines & increased volatility.

• S&P 500 +1.74% Dow +1.55% Russell 2000 +2.35%, Nasdaq +2.14%.[1]

• The All-Country World Index gained +2.07%.1

S&P 500 sub-sectors were all higher last week.

• Real Estate led to the upside with a gain of 3.34%.1

• Financials were the weakest performer but still closed positive at +0.04%1

The CBOE Volatility Index (VIX) closed higher but well off its highs of the week.1

US Treasury bond yields moved lower last week.

• US 2yr -0.06% at 3.46%, 10yr -0.06% to 4.00%, 30yr -0.03% to 4.60%.1

• Yields moved lower on increasing concerns relating to economic health.

Commodities as an aggregate asset class was mixed last week.

• WTI Crude declined -2.36%.1

• Gold rose +5.64%.1

The US Dollar index was down -0.46%.1

In our opinion, U.S. economic data was limited week as a result of the gov’t shutdown.

• The Small Business Optimism Indec declined to 98.8 in its latest release.1

• The Uncertainty Index component rose to its 4th highest reading in history.1

• Build confidence increased in the latest data to a reading of 37.1

An index of equities outside the US (FTSE All-World ex-US) rose +2.85%.1

Conclusion

Stocks shrugged off some growing concerns relating to credit and closed higher last week.  

• While the Regional Bank Index fell 2% for its 4th consecutive week of losses, major indices shrugged it off and closed higher.

• The small-cap tracking Russell 2000 led major indices higher with a gain of +2.35% while the tech-heavy Nasdaq also gained over 2%.1

The VIX volatility index briefly touched above 28 last week before closing at 20.73.1

• Under the surface, positioning in the volatility complex shows investors shifted a large amount of money to hedge possible downside risks over the last 2 weeks.

• The speed of this shift (VVIX) hit its highest mark since April’s tariff sell-off.1

• Despite the bearish positioning, major stock indices seemed to take it in stride.

S&P 500 subsectors were all higher last week.

• Real Estate led to the upside by a wide margin on the back of sinking interest rates.

• Financials were spared a negative week despite growing write-offs by major banks relating to bad credit.1

Non-US equities were also positive last week by over 2%.

The US Dollar had its worst week in more than 2 months as it declined -0.46%.1

• We believe this is on the back of Fed Chairman Powell’s speech that was taken as very dovish by participants who bet on even more interest rate cuts by the central bank this year.

US Treasuries saw their yields drop last week on the back of bank’s credit exposure concerns.

• As rattled investors shifted assets to treasuries, the Fed policy sensitive 2yr dipped below 3.4%, its lowest level since 2022.1

• The 10yr briefly went below 4% on Friday.1

Yields have been tumbling as the market fears a weakening labor market, cheers Fed rate cuts, & worries about credit standards in the banking system.

• Additionally, in the yield complex, the SOFR intrabank overnight rate spiked last week to its highest level in 6 weeks.1

• This could be October tax payments or it could be a sign of stress, but it bears continued monitoring.

Commodities continued to have mixed performances of the underlying constituents.

• The price of oil fell for the 3rd straight week and briefly traded below $57/barrel for the first time since May.1

• Concerns about a potential oversupply and the economic outlook have impacted prices.

• Metals on the other hand continue to do well with gold leading the way.

  
  

Justin Greenhill - Chief Investment Officer – justin@sollinda.com 

Ryan A. Mumy, CFP® - CEO – ryan@sollinda.com 

Phone:  844/662-1211

[1] Source: Bloomberg – 10/17/2025