Russell 2000 Reaches Fresh Record, But Enthusiasm Faded Intraday: Oct. 15, 2025

Another round of strong earnings reports from big banks resulting from M&A activity, trading profits and growing wealth management offset worries about persistent Washington and Beijing trade tensions this morning, which restored animal spirits. But this enthusiasm eased intraday, causing stocks to move well off their early morning highs. This Wednesday’s out-performer, meanwhile, is the Russell 2000, the only major domestic equity benchmark to hit an all-time high today. The cyclically oriented gauge comprised of smaller firms with weaker balance sheets and a bigger share of money losing companies relative to its larger counterparts is poised to benefit disproportionately from additional monetary policy accommodation. Part of the bullishness stemmed from Fed Chair Powell, who just yesterday signaled more rate cuts amidst the possible end of quantitative tightening. Decelerating employment conditions alongside the government shutdown, which is on its 15th day, are supporting the argument to continue walking down the central bank’s stairs. In market action, rates and the greenback are nearly flat as fixed-income watchers snore against the backdrop of a lack of economic data that are critical when making investment decisions for Treasuries and currencies alike. The risk-on mood has weighed on prices for volatility protection instruments, a result of lesser hedging demand, while the commodity majors ex energy are all bullish as gold marks a record again, climbing above $4,200. Bitcoin is continuing to falter, however, although forecast contracts are catching bids.

Stocks Retreat as Wall Street Awaits More Evidence

Today’s stock market trading has been interesting to say the least so far, with stocks flying off the sound of the bell before market participants’ bullishness tapered around 10:00 am. Investors don’t appear ready to send equities back to fresh records, as they await more earnings reports and commentary from Washington or Beijing before they start bidding aggressively. Meanwhile, volatility levels remain elevated, signaling the potential for abrupt moves in either direction as participants look for any important news that could influence sentiment and risk-taking behavior. Still, conditions remain favorable into year-end, and October isn’t a terrific month for returns historically speaking. There could also be some backloaded seasonality being factored in, since we did close a superb September. In conclusion, however, the next two months are among the best as it relates to capital appreciation when examining past years.

International Roundup

South Korea’s Trade Surplus Widens

South Korea’s trade surplus grew in September with the country’s exports up 12.6% year over year (y/y). The economist consensus estimate called for a 12.7% gain after a sluggish 1.2% increase in August. Exports, meanwhile, outpaced imports by $9.5 billion, marginally missing the economist consensus estimate but expanding from $6.5 billion in the preceding month. The loftier surplus occurred even as September imports matched the consensus estimate for an 8.2% y/y jump after a 4.1% August contraction.

Deflation Persists in World’s Second-Largest Economy

Wholesale and retail deflation in China continued last month, according to data from the National Bureau of Statistics. The Producer Price Index, which measures how much businesses charge each other for items and services, was down 2.3% y/y, matching the economist consensus estimate and improving from the 2.9% August slip. Shoppers, furthermore, saw retail prices based on the Consumer Price Index sink 0.3% y/y, which was worse than the economist consensus estimate of -0.2%. The index descended 0.4% in the preceding month. After being flat m/m in August, prices inched up 0.1% in September, marginally below the estimate for a 0.2% increase. The Core CPI, which excludes items with volatile pricing, was more encouraging with a 1% y/y increase. The overall results, however, point to the country struggling with weak demand despite a year-to-date increase in exports.

And Loan Issuance Disappoints

New loans to businesses and individuals totaled 1.29 trillion yuan, or roughly $181 billion, last month, falling below the economist consensus estimate of 1.46 trillion yuan despite climbing from 590 billion yuan in August. The September activity was 6.6% higher than in the year-ago period, a deceleration from 6.8% in August and below the estimate of 6.7%.

Japan Industrial Production Falls

Japan’s industrial production weakened in August, sinking 1.5% month over month (m/m), a worse result than the 1.2% contraction expected by economists and July’s 1.2% drop. In a similar matter, capacity utilization dipped by 2.3%, an acceleration from the 1.1% negative change in July.