COMMENTARY:
- Markets stumbled this week as investors digested a mix of hot inflation data and geopolitical developments, but defensive pockets provided shelter. The S&P 500 dropped 2.4% for the week ending October 10, 2025, as rising Treasury yields and renewed concerns over global growth pressured risk assets.
- Utilities led the market with a 1.5% gain, benefiting from their defensive profile and steady dividend appeal amid heightened volatility. Contributors included NextEra Energy (+4.1%) Southern Co. (+4.0%) and Duke Energy (+2.8%) collectively make up about a quarter of the sector’s exposure.
- Crude oil fell sharply after global demand forecasts were downgraded, directly impacting Energy shares. The sector dropped 4.2%. Exxon Mobile (-2.2%), Chevron (-3.0%) and ConocoPhillips (-6.9%) were some of the big companies were impacted by ongoing trade disputes and currency volatility in emerging markets added to investor caution.
- Consumer Discretionary (-3.8%) and Materials (-3.4%) rounded out the worst three sectors this week. Fresh trade tensions and tariff threats triggered a sharp sell-off in consumer stocks with global supply chain exposure and retail names, just as the holiday season approaches. Also, a pull-back in dome commodity prices, combined with weaker industrial demand forecasts dampened sector momentum.
- Despite the pullback, the week’s performance reinforced the value of diversification—defensive sectors proved resilient, suggesting that balanced positioning can help investors weather short-term storms while staying on track toward long-term goals.
ETF Tidbits:
- Record-Breaking Flows: ETFs are closing in on $1 trillion in net inflows in 2025, with $997 billion as of October 9, approaching a second consecutive record year for the industry.
- Diverse ETF Launches: Over a dozen new ETFs debuted this week, including leveraged single-stock and thematic products and new offerings in emerging markets, special situations, infrastructure, and crypto.
- Crypto & Share Class Innovations: The SEC fast-tracked regulatory approval for crypto ETFs and granted a go-ahead to add ETF share classes to mutual fund, a move that signals the potential for more mutual funds to adopt ETF share classes, broadening access and tax-efficiency.
