Weekly Market Update: November 10, 2025
Federal Reserve Chairman Jerome Powell struck a cautious tone at the October Federal Open Market Committee (FOMC) meeting. True, the central bank did as expected, lowering the federal funds rate by a quarter-point, to a range of 3.75% to 4.00%. However, with inflation still running notably above the Federal Reserve’s target rate and the scarcity of labor market data due to the federal government shutdown, another rate cut at the December FOMC meeting is far from a foregone conclusion, he indicated.
Even with the interest-rate uncertainty, the Fed still remains on a less-restrictive monetary policy course. On point, the lead bank said it will end its quantitative tightening, which refers to the Fed reducing its holdings of Treasury securities. That program tended to keep bond yields high. The central bank ending it (on December 1st) is intended to lower bond yields and boost economic activity. In taking this action, the Fed cited currently constricting money market conditions and declining bank reserves. This announcement, along with Wall Street’s belief that the Fed is still likely to cut the benchmark short-term interest rate in December, was likely why the stock market had an orderly response to the Fed news.
Sentiment is that the labor market is weakening, but not falling off the proverbial cliff. With two monthly employment reports delayed, the Fed is relying on ancillary data to formulate an assessment of labor market conditions. The private sector payroll report from Automatic Data Processing has shown modest gains, while the last released Job Openings and Labor Turnover Survey ( JOLTS) revealed that job openings totaled 7.2 million. On the negative side, a number of prominent corporations, including Amazon and United Parcel Service, recently announced layoffs.
Meanwhile, third-quarter earnings season has been another successful campaign for Corporate America. With roughly two-thirds of the S&P 500 companies having reported results as of press time, nearly 80% have exceeded profit prognostications. The forecasted earnings growth rate has been raised to nearly 11%, which, if realized, would mark the fourth-consecutive quarter of double-digit growth for the index.
Conclusion: The elements, including a less-restrictive central bank and solid corporate earnings, are in place to lift the indexes to new records before year end. Nonetheless, additional gains may be incremental as investors are concerned about the market’s elevated valuation.
Source: ValueLine.com
