Murphy's Market Minute | October 3, 2025

The stock market continues its strong run in 2025, with all major indices reaching new all-time highs this week. Year-to-date, the S&P 500 is nearly 15%, while the Nasdaq 100 has gained 18%. The federal government’s fiscal year ended Tuesday night without a budget agreement, triggering a government shutdown on Wednesday. Historically, shutdowns have had minimal lasting impact on markets, with stocks often rising slightly during these periods. However, the immediate effect has been a delay in key economic data: today’s BLS September employment report was not released, and inflation reports will also be postponed if the shutdown persists. These data points are critical for the Federal Reserve ahead of its next policy meeting on October 29-30. We did receive ADP’s private payroll report, which showed a decline of 32,000 jobs in September, well below expectations for a gain of 45,000. This weaker reading strengthens the case for additional Fed rate cuts. Futures markets, per CME FedWatch, now price in a 97% probability of a quarter-point cut in October to 4.50-4.75%, with an 85% probability of another cut in December to 4.25-4.50%. Looking ahead, Q3 earnings season kicks off next week, with expectations strong for continued corporate earnings growth. Between easier monetary policy and solid earnings prospects, we believe the final stretch of 2025 sets up well for equities.