STOCK MARKET RECAP OCTOBER 2025
- philmcavoy
- Oct 20, 2025
- 2 min read
The stock market has increased by about 1% over the last month. The steady climb higher was interrupted on October 10th due to China tariff concerns. The market fell almost 3% on the 10th of October. We have gained back most of those losses in the last week.
The S&P 500 is now up almost 13% for the year and the Nasdaq is now up about 17% in 2025 – despite the 19% drop during the tariff announcements in April.
In the chart below you can see the extreme price volatility in April and the steady move higher over the last five months.
We are not receiving timely inflation or jobs data due to the government shutdown. The market is expecting two more rate cuts from the Fed before the end of the year. AI spending continues to drive economic growth in the US.
The steady and consistent increases in stock prices are a cause for some concern. My valuation gauge indicates that the stock market (S&P 500) is now about 25% above its fair market value in late October. This is higher than we were in January 2022 just before the 2022 bear market. The last time the market was overvalued by this much was in 2000 during the dot-com bubble.
I do not trade based on market valuation levels and you should not either. It is just a reminder that you need a strategy in place to protect your savings in case we experience a bear market. Older investors in particular need loss protection.
Stay Disciplined My Friends,
Phil
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