Investors Await Catalysts Before Sending Equities to New Records: Oct. 22, 2025

Robust corporate earnings are failing to support stocks today, which are trading just shy of all-time highs. Indeed, investors seem to be looking for fresh catalysts that could stem from a US-China trade deal, huge beats from the magnificent 7, a favorable CPI print this Friday or an end to the government shutdown to drive equities to new peaks. The S&P 500 last reached a record 13 days ago on Oct. 9 and is about 1% away from that level. Despite profitability results arriving strong overall, poorly received reports from Netflix and Texas Instruments are weighing on sentiment. Treasuries and the greenback remain steady, however, as a lack of economic data largely has bulls and bears sitting on their hands waiting to choose a direction. Volatility protection options are catching bids. The commodity complex is mostly bearish, with gold and silver continuing their aggressive slides. Conversely, crude oil and copper futures are gaining.

Potential Tailwinds Could Push Equities Higher

Equities face a number of tests in the coming days that will determine whether bulls can push the asset class to new heights. Top of mind is Tesla’s earnings after the bell today, considering that the company is the first of the magnificent 7 to report quarterly results. The group has driven the current bull market and investors will be seek continued AI progress amidst growing capital expenditures for signs that the tech sector’s short-term prospects remain buoyant. Developments from Washington can also help stocks leap to fresh records, with a US-China trade deal or an end to the government shutdown bolstering the economic outlook at a time when the seasonal tailwinds of Thanksgiving and Christmas can potentially reignite speculative fevers. And finally, this Friday’s CPI print could strengthen confidence that the projected amount of rate cuts is appropriate, in light of fixed-income watchers expecting two more this year and three in 2026, landing the Fed’s benchmark at 3.63% by this December and 2.88% by the end of next. Conversely, a hotter-than-expected CPI could derail dovish monetary policy projections and contain the pace of both profitability and valuation expansion. Either way, however, strong growth isn’t necessarily conducive to significant central bank reductions, although the cyclically oriented areas of the economy would benefit greatly from lower financing costs.

International Roundup

South Korea Wholesale Price Gains Accelerate

Wholesale prices in South Korea climbed 0.4% month over month (m/m) and 1.2% year over year (y/y) in September after a monthly decline of 0.1% and an annual increase of 0.6% in August, according to the Producer Price Index.

The following categories and the extent of their price changes contributed the most to the higher m/m result:

• Electric power, gas, water & waste, 1.1%
• Agricultural, forestry & marine products, 0.4%
• Services, 0.4%
• Manufacturing products, 0.2%

 Japan Reports Unexpected Trade Deficit

Japan’s new prime minister, Sanae Takaichi, started her second day on the job with news that Japan experienced a September trade deficit despite the country’s exports climbing 4.2% y/y. The value of imports last month exceeded exports by ¥234.6 billion ($1.5 billion). The economist consensus estimate called for a ¥22 billion surplus after an August deficit of ¥242.8 billion. While the value of shipments sent abroad grew after slipping 0.1% in August, it trailed the estimate for a 4.6% y/y expansion. Indeed, Japan’s exports to other Asian nations jumped 4.2%, offsetting a 13.3% drop to the US. It was the sixth straight month of declining exports to the world’s largest economy. Electronics and mineral oil accounted for much of the overall increase in foreign shipments. Imports were 3.3% higher y/y, much stronger than the 0.6% estimate. The category sank 5.2% y/y in August.

Inflation Steadies in the UK

Consumer price pressures in the UK were virtually unchanged in September but inflation on the wholesale level accelerated, according to the Office for National Statistics. The Consumer Price Index Including Housing, or CPIH, was up 0.1% m/m and 4.1%, matching the preceding month’s results. When excluding shelter, the CPI was flat m/m, which while down from 0.3% in August was unchanged on a y/y basis relative to the 3.8% print for the eighth month of the year. Economists anticipated a 4% y/y hike. For both indices, transportation increased the most m/m, but the impact of the change was offset by the recreation and culture category and the food and non-alcoholic beverages group. When excluding energy, food, alcohol and tobacco, which have volatile prices, the resulting core CPI was flat m/m. Economists anticipated a 0.2% climb following August’s 0.3% result. Relative to September 2025, prices were up 3.5%, cooler than the economist estimate of 3.7% and August’s 3.6% ascent.

Businesses, meanwhile, experienced mixed results regarding input costs and the amount that they could charge on a wholesale basis. The Producer Price Index reflected input prices falling 0.1% m/m. Economists anticipated a positive 0.3% change following the 1.1% hike in August. The category climbed 0.8% y/y, slightly hotter than 0.7% in the prior print. Output prices were also mixed, with no m/m change but up 3.4% y/y. In August, wholesale items fetched 0.6% m/m and 1.1% y/y more.