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Fixed Income & Equities Markets Week in Review

 
 
October 10, 2025

Fixed Income Update

Treasury yields edged slightly higher this week but remained comfortably within the well-established range that has held since mid-September. With the federal government still shut down—delaying the release of most Tier-1 economic data - the market has been left to interpret developments without its usual data-driven guidance. 

One of the few notable releases was the minutes from last month’s FOMC meeting, published on Wednesday. While they didn’t contain any major surprises, they did confirm the Fed’s shifting view on labor market risks. At that meeting, the FOMC opted for a 25 basis point rate cut, citing signs of labor market cooling. You’ll remember one participant advocated for a more aggressive 50 basis point cut, while others argued for holding rates steady - highlighting the diversity of opinion within the committee. 

Fed officials were also active this week, offering public remarks that largely echoed their previous positions. New York Fed President John Williams reiterated his view that further rate cuts are warranted due to labor market weakness. In contrast, Kansas City’s Jeff Schmid and St. Louis’s Alberto Musalem expressed caution about additional easing. Meanwhile, Fed Governor Stephen Miran continues to push for more aggressive rate cuts. Despite some debate, our assessment is that a majority of voting FOMC members still favor at least one more rate cut before the end of 2025. 

On the geopolitical front, the announcement of a ceasefire between Israel and Hamas has had minimal impact on U.S. financial markets so far. Economically, the cessation of hostilities could help stabilize oil prices and reduce demand for safe-haven assets like gold and alternative currencies. However, it’s important to note that the ceasefire only covers the initial phase of a broader peace plan. According to Bloomberg News, negotiations on the remaining components are expected to continue over the coming days. 

For the week, Treasury yields were higher by 3-5 basis points.

As of October 10, 2025

Index 

Current 

Last Week 

Wk Chg 

Last Year 

Yr Chg 

Tax-exempt MMF 

2.70% 

2.83% 

-.13% 

2.83% 

-.13% 

Taxable MMF 

4.10% 

4.12% 

-.02% 

4.86% 

-.76% 

 

 

 

 

 

 

2-Year Treasury 

3.59% 

3.54% 

.05% 

4.02% 

-.43% 

5-Year Treasury 

3.73% 

3.67% 

.06% 

3.92% 

-.18% 

10-Year Treasury 

4.14% 

4.08% 

.05% 

4.07% 

.06% 

30-Year Treasury 

4.72% 

4.69% 

.03% 

4.34% 

.38% 

5-Year Exp. Inflation 

2.43% 

2.40% 

.03% 

2.23% 

.20% 

 

 

 

 

 

 

2-Year Corporate* 

3.92% 

3.88% 

.04% 

4.30% 

-.38% 

5-Year Corporate* 

4.22% 

4.17% 

.05% 

4.42% 

-.20% 

10-Year Corporate* 

4.84% 

4.79% 

.05% 

4.85% 

-.01% 

30-Year Corporate* 

5.51% 

5.47% 

.03% 

5.24% 

.26% 

 

 

 

 

 

 

2-Year Municipal** 

2.41% 

2.38% 

.03% 

2.50% 

-.09% 

5-Year Municipal** 

2.43% 

2.41% 

.02% 

2.52% 

-.09% 

10-Year Municipal** 

3.02% 

3.04% 

-.02% 

2.85% 

.17% 

30-Year Municipal** 

4.48% 

4.47% 

.01% 

3.90% 

.58% 

 

 

 

 

 

 

10-Year German Govt Bond 

2.70% 

2.70% 

.00% 

2.26% 

.44% 

10-Year U.K. Govt Bond 

4.74% 

4.71% 

.03% 

4.18% 

.56% 

10-Year Japanese Govt Bond 

1.69% 

1.65% 

.04% 

.92% 

.77% 

10-Year Spanish Govt Bond 

3.24% 

3.24% 

.00% 

3.01% 

.23% 

10-Year Italian Govt Bond 

3.51% 

3.52% 

-.01% 

3.56% 

-.05% 

 

 

 

 

 

 

Fed Funds 

4.25% 

4.25% 

.00% 

5.00% 

-.75% 

Prime Rate 

7.25% 

7.25% 

.00% 

8.00% 

-.75% 

Dollar*** 

$99.41 

$97.85 

$1.56 

$102.93 

-$3.52 

CRB 

$299.33 

$298.33 

$1.00 

$286.14 

$13.19 

Gold 

$3,961.20 

$3,839.70 

$121.50 

$2,606.00 

$1,355.20 

Crude Oil 

$61.48 

$60.48 

$1.00 

$73.24 

-$11.76 

Unleaded Gasoline**** 

$1.88 

$1.85 

$0.03 

$1.98 

-$0.10 

Note: Municipal yields are as of the previous business day.

* Composite A
** General Obligation AA+
*** Int'l value of the U.S. dollar (Avg. exchange rate between the dollar and 6 major world currencies).
**** Futures price per gallon

Callen Young
Callen Young
VP / Portfolio Manager
 
Callen is the bank’s primary fixed-income strategist and oversees the strategy, implementation, and trading of all fixed-income securities for both private and institutional capital. Read Callen's bio >

Stock Market Update

The ongoing US government shutdown and lack of major catalysts left US stocks devoid of meaningful directional drivers for much of the week. Major US indices were mixed on the week through Thursday’s close, with the S&P 500 Index and Nasdaq Composite moving higher despite a dearth of economic data and some scrutiny surrounding the artificial intelligence (AI) theme. Market volatility jumped higher Friday morning after President Trump’s critical comments regarding China and its rare earth mineral policies lifted US-China trade tensions. US stocks dropped Friday morning following Trump’s comments and major US indices were all on pace to finish in the red for the week.  

The US government shutdown continued to have little impact on investor sentiment this week. A concern of the shutdown though has been the delayed release of key economic data. That may leave the Federal Reserve (Fed) without fresh labor market and inflation data when making their next interest rate decision later this month. The Fed has stressed data dependence, thus an absence of fresh economic data may complicate a decision. As of Friday morning, the CME FedWatch Tool showed a 94.6% probability of a 25-basis point interest rate cut at the Fed’s October meeting. 

AI headlines were a mixed bag this week. Advanced Micro Devices’ (AMD) announced partnership with OpenAI was a boon for the AI theme on Monday; AMD shares skyrocketed higher by 23.7% on the day. As part of the agreement OpenAI will purchase an unknown amount of AMD’s AI chips and have an opportunity for up to a 10% equity stake in AMD. Monday’s enthusiasm surrounding the AI theme quickly reversed on Tuesday following a report that noted Oracle (ORCL) was seeing weaker than expected cloud margins. The report sparked concerns regarding AI profitability and the potential of an AI bubble. Return on AI investment will likely be a key focus for investors ahead.  

Friday morning saw trade worries resurface for US investors after President Trump threatened to impose higher tariffs on China given the country’s rare earth metals policies. Trump’s social media post pushed US stocks deep into the red as of late Friday morning. While Trump was expected to meet with President Xi at the upcoming Asia-Pacific Economic Cooperation forum, his post noted there was no reason to have the meeting. We will see how this new development progresses in the coming days, and what impact it may have on US stocks. Friday’s market response was notably risk-off. 

While the path of least resistance for US stocks has been to the upside in recent weeks, Friday’s revival of trade worries may have put a dent in that path. In addition to the renewed US-China trade tensions, the market will also be focused on third quarter earnings next week. We will see if Fed easing expectations and AI optimism can continue to push US stocks higher into year end. 

As of October 09, 2025

Index

Current Week

Month of Oct.

YTD

Dow Jones Industrial Avg.

-0.84%

-0.06%

10.41%

S&P 500

0.30%

0.73%

15.66%

Nasdaq

1.07%

1.62%

19.84%

MSCI EAFE

-0.66%

0.92%

26.87%

Russell Mid Cap

-0.78%

-0.05%

10.36%

Russell 2000

-0.29%

1.35%

11.87%

Gayle Sprute
Gayle Sprute
VP / Senior Portfolio Manager
 
Gayle is the primary equity strategist for Washington Trust, providing custom investment and risk management strategies for clients with complex financial needs. Read Gayle's bio >