Weekly Macro Trends Report

Oct 26, 2025

∙ Paid

SEQH Capital Partners Macro Tear-Sheet

Major Indices Rally: S&P 500 +1.1%, Dow Jones +1.6% (above 47,000 for the first time), Nasdaq +1.2%. Small-caps (Russell 2000) outperformed, +2.4%, signaling rotation as rate cut bets intensify.
Breadth Improving: Equal-weight S&P 500 and small caps led, reversing 2024’s narrow leadership. Tech remains dominant, but healthcare and financials rotated into “improving” based on RRG analysis.

Beat Rate: 87% of reporting S&P 500 constituents topped EPS estimates. Aggregate year-over-year earnings growth at 9.2%; revenue growth at 7.0%.
Sector Highlights: Financials +20.2% YOY (investment banking, trading, net interest income), Tech +22.3% (AI-driven), Utilities +21%, Communication Services +18.7%.
Earnings Ahead: Five “Magnificent Seven” (Alphabet, Amazon, Apple, Meta, Microsoft) report next week, representing 25% of S&P cap—critical for risk appetite.

CPI: September headline +3.0% YOY, softer than expected, but double the Fed’s target; core also at +3.0%. Gasoline and apparel led monthly gains.
Rate Cuts: Fed expected to cut 25bps (to 3.75%-4.00%) at October 28-29 FOMC meeting, with a second cut highly probable in December. Guidance could be limited due to government shutdown data vacuum.
Fixed Income: 10-year yield ~4.02%. Curve steepening (10-2yr spread at 0.54%) reduces recession risk signals. Shutdown boosts Treasury demand.

Trade War: U.S. escalates tariffs—Trump announces additional 100% tariff on Chinese goods and new controls on critical tech. China expands rare earth export controls. High-stakes Trump-Xi meeting late October could reset market tone.
Russia Sanctions: New sanctions target Rosneft/Lukoil; EU bans Russian LNG. WTI crude rallied briefly but remains below $62/barrel—energy sector still underperforming.
Government Shutdown: 700,000+ federal workers furloughed; GDP drag estimated at 0.1-0.2% per week. If unresolved, could lower Q4 growth by as much as 2%.

Gold: Hit $4,381/oz before sharp correction to $4,110—still +9.6% for the month and +49.6% YTD. Central bank demand, dollar weakness, geopolitical risk support bullish long-term trend.
Oil: Month’s low at $55-56, ends week at $61.44. YTD down 14.4%. Bearish on supply, trade, and demand.
Bitcoin: Stable at $111,254 after correction from ATH above $125,000. On-chain metrics show renewed accumulation; upside remains if risk stays bid.

Bull Case: Improving breadth, robust earnings, Fed easing, technical strength, and seasonal tailwinds.
Bear Case: Peak valuations (S&P forward P/E 22.7x), concentration risk (Mega-cap tech), escalation risk (trade/shutdown/sanctions), emerging credit stress, VIX complacency.
Overweight: Financials, Utilities, Healthcare.
Market Weight: Tech, Communication Services, Industrials.
Underweight: Energy, Consumer Discretionary, Real Estate.

FOMC Rate Decision (Oct 28-29): Rate cut and Powell’s comments are critical for equity/credit direction.
Mega-Cap Tech Earnings: Cloud, AI, consumer demand and margin signals in focus.
Trump-Xi APEC Summit: Any trade détente could trigger a relief rally. Failure would reignite risk-off sentiment.
Shutdown Resolution?: Monitor for breakthrough or further GDP risk.

Maintain core exposure to quality U.S. large-caps, defensive sector tilt.
Hold cash for tactical buying if volatility spikes.
Hedge elevated risk—protective puts/vol index exposure.
Rebalance away from overextended Magnificent Seven names.

FULL 12-PAGE MACRO TRENDS REPORT BELOW: