By Rick Schwerd | November 7, 2025
Our investment team remains committed to sharing updates and market insights to keep you informed. Please look for our next update on November 21.
Government Shutdown Continues
The government shutdown is now the longest in U.S. history, even as pressure builds to come to an agreement. The FAA plans to cut flights by up to 10 percent at 40 major airports in the coming week due to the shutdown. Air traffic controllers are not being paid, and we are just three weeks away from the all-important Thanksgiving travel period.
We are also not receiving the normal government economic data, making it difficult to get a firm read on current strength of the economy. For the second straight month, we did not receive monthly employment data. Some private reports appear to show that the labor market is stable; however, the picture remains far from clear. September’s Consumer Price Index (CPI) data released in late October showed both Headline and Core CPI at 3 percent—slightly better than expected but still well above the Federal Reserve’s 2 percent target.
Supreme Court Hears Tariff Arguments
The Supreme Court heard oral arguments Wednesday in the high-stakes case challenging President Trump’s authority to impose sweeping tariffs. Although the administration’s lawyers warned of “catastrophic” consequences if the policy was struck down, justices from across the political spectrum expressed deep skepticism about the tariffs’ legality.
A ruling against the administration’s tariffs could trigger refunds of at least a portion of tariffs already collected and disrupt one of the president’s signature policies. The administration maintains that they could continue tariffs under other legal frameworks, even if they lose this current case.
Fed Cuts Rates
The Federal Reserve cut rates an additional quarter point last week, bringing the current Fed Funds Rate to a range of 3.75 percent to 4 percent. Several Fed governors expressed concerns about an additional cut at their December meeting, given the lack of economic data and inflation remaining above target. However, markets are continuing to put the possibility of a December cut at 70 percent. Lower rates are benefiting not only individuals and businesses, by reducing borrowing costs, but also decreasing the government’s cost for servicing the debt, thus reducing the deficit.
Strong Earnings Season Continues
This is the last big week of earnings releases with 90 percent of the S&P 500 having reported third-quarter earnings so far. The numbers are strong. According to research firm The Earnings Scout, earnings growth for the quarter is nearly 11 percent, with sales growth running at 8.5 percent. The three-year average for both is approximately 5 percent. The energy, information technology and financial sectors have been leading the way with 20-plus percent earnings growth for all three.
Equity indexes have pulled back recently after a strong run-up. The S&P 500 hit 6,900 last week for the first time and is now trading at around 6,660. The index is up 13 percent for the year. The ongoing government shutdown is likely weighing on markets.
As always, if you have any questions or concerns regarding markets or your financial planning needs, please reach out to us at (518) 415-4401.
About the Author: With almost three decades of financial industry experience, Rick serves as a Senior Investment Officer at Arrow Bank, formerly named Glens Falls National Bank and Saratoga National Bank. He oversees individual and corporate retirement plans, personal trusts, investment management accounts, foundations and not-for-profit relationships.