Earnings & Dwindling Inflation Propel Equities in October – Domestic Equity Update

The information technology sector extended its leadership in October, maintaining the momentum that has defined markets since the start of the year. Utilities and communication services have also bolstered the S&P 500’s performance, as investors continue to favor companies tied to artificial intelligence—a dominant theme in 2025.

Analysts say the market is shifting toward a stock picker’s environment, where individual company performance matters more than broad index exposure. The outsize influence of the “Magnificent Seven”—whose gains have accounted for much of the S&P 500’s advance—underscores how select names are driving returns and may continue to outpace the broader market. So far this year, biotechnology, telecommunications, semiconductors, and aerospace stocks have led sector gains, while transportation, homebuilding, and regional banking have trailed, reflecting a more uneven economic landscape beneath the headline indexes. (Sources: S&P, Dow Jones, Nasdaq, Bloomberg)

Bond Market Hesitant About Economic Data – Fixed Income Overview

The Federal Reserve announced it would stop selling its inventory of Treasury bonds, a process it has used since 2022 when it began raising interest rates. The reduction in the supply of Treasuries entering the market is expected to help lower bond yields, as reduced supply tends to push prices higher. The Fed has been passively shrinking its $6.6 trillion asset portfolio since mid-2022, when holdings peaked at nearly $9 trillion as part of its extraordinary efforts to support financial markets and the economy.

The reliability of inflation and employment data has become a challenge for the Federal Reserve’s policy objectives, prompting officials to rely increasingly on private-sector research in addition to their own reports, such as the Beige Book. (Sources: Treasury Dept., Federal Reserve)

Why A TV Only Costs $6 Today – Technological Advancement

The average cost of a standard television in the United States, adjusted for inflation, has fallen sharply over the past 50 years. A TV that cost $1,000 in 1950 would cost roughly $6.19 in 2025 for an equivalent product.

Advances in technology have driven television prices sharply lower in recent decades, as resistors, semiconductors, and display panels have become lighter, more efficient, and cheaper to produce. Televisions are among the few products to experience steep price deflation compared with overall inflation trends.

In 1980, a typical 19-inch color TV cost about $400 in today’s dollars. That same amount now buys a much larger 65-inch model with smart technology that didn’t exist 45 years ago. Innovation has likewise reduced costs across many products—especially in electronics, energy, and software—making them more affordable and accessible to millions of consumers. (Sources: Federal Reserve Bank of St. Louis, BLS)

Social Security COLA Increase of 2.8% Lags Medicare Premium Increase in 2026 – Retirement Planning

Social Security recipients are set to receive a 2.8% increase in 2026, a modest uptick from the cost-of-living adjustment (COLA) in 2025. For many beneficiaries, the higher payments will largely offset rising living expenses and increased Medicare premiums. The benefit hike takes effect in late December 2025 for Supplemental Security Income (SSI) recipients and in January 2026 for those receiving Social Security.

Many retirees worry that the increase will fall short of covering costs rising at a faster pace—particularly essentials such as food, energy, and out-of-pocket medical expenses not covered by Medicare. Premiums for Medicare Part B are projected to climb 11.6% at the start of 2026, more than four times the size of the COLA increase.

Social Security was established on August 14, 1935, when President Franklin D. Roosevelt signed the Social Security Act into law. Since then, the program has provided millions of Americans with benefits that automatically adjust for inflation through the COLA, which has been in place since 1975. The size of those annual increases has varied over time in line with changes in the inflation rate. (Source: Social Security Administration)

It’s The Wealth Effect That Keeps Everyone Spending – Consumer Economics

A key risk to the economy now is that much of the nation’s consumer spending is being driven by top earners benefiting from the wealth effect. If the stock market were to retreat or housing prices decline, that momentum could fade quickly. Despite persistent inflation and higher interest rates, consumers have remained surprisingly resilient. Economists attribute this confidence and persistence largely to the wealth effect—the tendency for people to spend more when they feel wealthier due to rising asset values.

The rise in the wealth effect has been fueled by gains in real estate and equity markets, which have boosted household net worth by an estimated $10.3 trillion over the past year. That surge has encouraged consumers to spend more out of current income. Some analysts draw parallels to the late 1990s, when similar patterns emerged. Economists view the wealth effect as a psychological response in which higher home and stock values are treated as if they were increases in income. In reality, such asset gains may prove unsustainable and could reverse, eroding consumer confidence and spending power if valuations decline.

Source: Federal Reserve Bank of St. Louis