Weekly Market Commentary November 3, 2025
WEEK IN REVIEW
U.S. consumer confidence fell modestly in October, with The Conference Board’s headline index easing to 94.6 from a revised 95.6 in September. The decline reflected weaker expectations for business, income, and employment over the next six months, while consumers’ assessment of current conditions improved slightly. Respondents cited rising prices and the ongoing government shutdown as key sources of concern, noting that the policy uncertainty has made it harder to gauge the strength of the labor market and inflation trends. Overall, the report suggested that households remain cautious about their economic prospects heading into the final quarter of the year.
At its October meeting, the Federal Open Market Committee (FOMC) voted to cut the federal funds rate by 25 basis points to a range of 3.75%-4.00%, a move that was widely expected by financial markets. Chair Jerome Powell emphasized that while the committee saw progress on inflation and some softening in labor conditions, the Fed is not on a preset course toward further easing. He reiterated that a December rate cut is not guaranteed, highlighting the need for flexibility given the lack of comprehensive data during the government shutdown. With key economic indicators, including jobs and inflation reports, delayed, policymakers have been relying on partial and private-sector data to guide decisions. The combination of an expected cut and a cautious tone reflected a balancing act — offering modest support to the economy while maintaining vigilance against renewed inflation pressures.
In the manufacturing and business sector, the Chicago Purchasing Managers’ Index (PMI) rose to 43.8 in October from 40.6 the prior month, marking an improvement but still signaling contraction. Gains in new orders and production helped lift the index, but activity remains well below the expansion threshold of 50. The modest rebound suggests that regional manufacturing may be stabilizing after a weak summer, though continued softness points to ongoing demand challenges and cautious business sentiment.
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