The Federal Reserve reduced interest rates by 0.25% last week, as widely expected. What surprised many was Chairman Powell’s follow-up: a December rate cut is “far from certain, not even close.”
Despite his hawkish tone, markets continued upward momentum, signaling investor confidence that additional rate cuts are in the not-too-distant future.
Weekly Market Performance
For the week ending November 1st:
- Dow Jones Industrial Average: +0.83%
- S&P 500: +0.76%
- Nasdaq Composite: +2.32%
- Russell 2000: –1.58%
- Foreign Stocks: –0.68%
- Emerging Markets: +0.17%
Bonds: The 10-Year U.S. Treasury yield ticked up to 4.083% after the Fed’s decision and press conference.
Rate Cuts and Fed Credibility
If a December rate cut is “not even close” to certain, one might ask: why lower rates now?
This move appears to reflect the complexities of a lame-duck Federal Reserve Chair, with Powell expected to be replaced by a more dovish successor next spring.
The question for 2026 becomes: How far will rates fall under a new, more dovish Fed? Markets will likely begin pricing that possibility well before it happens.
Corporate Earnings: Profits Still Doing the Heavy Lifting
Corporate America continues to deliver. So far, 83% of S&P 500 companies have reported earnings above expectations for Q3, led by Technology, Utilities, Financials, and Materials sectors.
Yet, not all good news has translated into higher share prices. Meta and Microsoft both posted strong profits, but shares fell after each announced plans to increase capital spending on AI. For long-term investors, such investments may ultimately prove wise — much like Meta’s prior reinvestment cycle, which eventually paid off.
Zuckerberg has proven time and time again that he is a forward-looking CEO who is not afraid of rustling feathers if it means realigning for a stronger future. It’s hard to count him out.
Meanwhile, Amazon surged 10% following a strong profit report and upbeat guidance. While many associate Amazon with online retail, its diversified business, from cloud services to logistics, continues to fuel its growth.
This week, 175 S&P 500 companies are set to report Q3 results. Earnings remain the primary driver of market direction, especially as investors weigh slower rate cuts against resilient corporate profits. Let’s hope the results continue to support the current level of the stock market.
Medicare Advantage Changes: Time to Review Coverage
For retirees, another key headline came from the Medicare Advantage world. According to The Wall Street Journal1, UnitedHealthcare and Aetna may be scaling back benefits and narrowing networks as rising healthcare costs squeeze profits.
Medicare Advantage insurers receive a fixed payment per enrollee, using that to fund services and retain what remains as profit. As medical expenses rise, those margins tighten, prompting some insurers to:
- Eliminate certain plan options
- Trim supplemental benefits
- Raise out-of-pocket costs
- Pull back from broader PPO networks that offer more provider flexibility
We are currently in the annual Medicare Open Enrollment period (October 15th – December 7th). If you’re enrolled in a Medicare Advantage plan, this is the time to review your coverage carefully. You can make changes until December 7th, and new elections take effect January 1st, 2026.
A thoughtful review now can help avoid surprises in the year ahead — particularly as plan structures and networks evolve. You can compare options directly at Medicare.gov.
What’s on Deck
- Jobs & wages: Labor data will drive the Fed’s December decision. A softer trend supports cuts; a re-acceleration argues for patience.
- Inflation prints: Headline and core readings remain the swing factor for both rates and COLA expectations.
- Earnings season, part two: Watch guidance on AI spending, pricing power, and consumer demand into Q4.
- Labor Report Watch: The October jobs report is slated for release this Friday, but with the government shutdown ongoing and September’s data already delayed, an on-time release remains uncertain.
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
All market data sourced from The Wall Street Journal, October 31, 2025.
1 https://www.wsj.com/health/healthcare/in-medicare-less-is-now-more-for-big-insurers-76897ddd
