Weekly Market Insights

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October 3, 2025 Volume 12 Issue 40

The S&P 500 and NASDAQ have risen this week, with a notable feature being the leadership from small-cap stocks, as indicated by the Russell 2000. Healthcare, gold, and metals miners have led among the market sectors. Finally, bitcoin is starting to show strength during a period of seasonal growth in Q4.

The most significant market impact from the government shutdown is the suspension of government-released economic data. The FOMC’s ability to assess the price level and the health of the labor market becomes less clear as data is delayed. The Fed next meets on October 28–29, and it seems likely that it will be harder to justify further rate cuts without these numbers. Polymarket betting indicates a 36% chance that the shutdown will extend beyond October 15, making it difficult to evaluate the labor market until the November payrolls, which are expected in early December. That report would probably show a surge in government furloughed workers returning, pushing the release of a ‘clean’ jobs report to early January with the December data. Uncertainty around growth, labor, and inflation remains high, and the shutdown will keep this uncertainty elevated.

Consumer confidence, JOLTs, and the September ISM PMI reports continue to indicate a resilient U.S. economy. Although the new orders and prices paid components of the PMI declined slightly, consumers remain a strong influence, generating nearly two-thirds of US GDP. However, only the top 20% are spending at a rate above inflation. The upcoming fourth quarter usually reflects the overall health of consumers, as holiday spending increases. This year, goods inflation from tariffs is expected to peak during the holiday season. Additionally, concerns have been raised about the effect of data centers on household utility bills. Power demand from data centers is projected to double by 2035, eventually accounting for about 9% of total demand, according to BNEF. This occurs at a time when the electrical grid is already struggling to upgrade aging infrastructure, raising the risks of rising prices and brownouts in some US power markets over the next year or two.

Have a great weekend!

The data and commentary provided herein is for informational purposes only. No warranty is made with respect to any information provided. It is offered with the understanding that Hilltop Holdings Inc., PlainsCapital Corporation, Hilltop Securities and PlainsCapital Bank (collectively “PCB”) are not, hereby, rendering financial and/or investment advice, and use of the same does not create any relationship with PCB. This is neither an offer to sell nor a solicitation of an offer to buy any securities that may be described or referred to herein. PCB does not provide tax or legal advice. Please consult your own tax or legal advisor regarding your specific situation.  Whether any of the information contained herein applies to a specific situation depends on the facts of that particular situation. Investment and estate planning and management decisions may have significant financial consequences and should be made only after consulting with professionals qualified to offer legal, accounting and taxation advice. Neither this document nor any portion of its content’s supplements, amends or modifies any account agreement with PCB. Unless otherwise noted:

*All economic release data referenced from public sources believed to be accurate. *The source of data for all charts/graphs included in this presentation is Bloomberg LP. *Figures quoted represent monthly changes (m/m) and are seasonally adjusted.

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