Weekly Economic Update – 10/20/2025

The Week on Wall Street

Stocks pushed higher last week, buoyed by strong third-quarter results posted by several money center banks.

The Standard & Poor’s 500 Index gained 1.70 percent, while the Nasdaq Composite Index rose 2.14 percent. The Dow Jones Industrial Average advanced 1.56 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, added 0.74 percent.^1,2

A Bumpy Week

Stocks rose to start the week after the White House shifted tone over the weekend on trade relations with China. Gains were broad-based—4 out of 5 stocks in the S&P 500 rose—with the index posting its best day since May 27.³

Overnight, the specter of a revived trade war with China reemerged after the country placed sanctions on U.S. subsidiaries of South Korean shipbuilders in an apparent effort to increase its control over global shipping. Stocks opened sharply lower the next morning, and then quickly staged an impressive rebound—helped by mostly positive quarterly earnings results from a handful of big money center banks.⁴

Stocks rose again midweek as better-than-expected Q3 corporate results from the biggest banks continued to roll in, overpowering negative sentiment around lingering trade concerns. As the week wrapped, bank stocks and all three broad market averages pushed through jitters to end in the green.^5,6,7

Bank Stock Paradox

While trade tensions with China dominated the attention during the week, some bank news also captured investor interest.

Last week, several money center banks reported expectation-beating Q3 results, underscoring the narrative of a healthy economy and robust consumer spending.

But there was a flip side to the banking sector: a smaller regional bank reported a $50 million credit loss from two commercial loans. The loss also hit larger banks with a stake in the loss. The news rattled the markets. For investors, it evoked memories of two regional bank failures in 2023, raised questions about whether this was a broader systemic issue, and put pressure on bank stocks, both big and small.⁸

Weekly Riddle

Fill in the blank: if Ruby’s mom is Patricia, then Patricia is the ____ of Ruby’s mother.

Last Week’s Riddle: A father tells his young son, “I will pay you $6.00 per hour for the 6 seconds you took to wash your hands before dinner.” So, how much does the boy earn for these 6 seconds of effort?

Answer: One cent. At a rate of $6 paid per 60 minutes, $6 divided by 60 works out to 10 cents a minute. Six seconds is one-tenth of a minute, so the boy earns 1 cent.

John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
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Posted on October 21, 2025