Momentum Carries into October
September is typically known as a difficult month for equities, yet this year it defied that reputation. The broader market ended the month up 3.1%, supported by strong earnings momentum, a resilient economy, and renewed optimism around the Federal Reserve’s rate-cutting cycle. The ongoing surge in artificial intelligence investments also continues to be a powerful catalyst for growth. Historically, October has marked the beginning of one of the best three-month stretches for equities. Since 1950, the S&P 500 has averaged a 4.2% gain from October through December, with positive returns in 80% of those periods. November through January also tends to perform well. While these seasonal patterns are encouraging, it’s important to remember that market performance is ultimately driven by current fundamentals, corporate earnings, policy decisions, and global developments. For now, the data shows strength heading into what is typically one of the market’s most favorable windows.
Earnings Season Takes the Stage
As the fourth quarter begins, all eyes turn to third-quarter earnings. Current expectations call for nearly 7% growth in S&P 500 earnings, a strong figure that could support continued market gains if companies deliver on it. Two sectors stand out this season: financials and utilities. Financial companies are projected to grow earnings by almost 9%, and much of the focus will be on their commentary around compliance costs. Despite talk of deregulation, few measurable changes have occurred, so investors will be watching to see whether lower compliance expenses begin to show up in reports. Meanwhile, utilities, traditionally a slow-growth sector, are expected to post an impressive 9.7% earnings increase. That surge is largely driven by soaring demand for electricity tied to data centers and AI infrastructure. In Virginia alone, roughly 40% of all electricity consumption now goes to data centers. As these companies navigate growing energy demands, the key question will be how they manage costs so that higher usage from large-scale consumers doesn’t overly impact residential customers. Both sectors are worth watching closely, not just for their immediate results, but for the forward-looking strategies they outline to sustain growth into 2026.
Government Shutdown Adds Data Gaps
The recently announced government shutdown adds a new layer of uncertainty. While it’s not expected to have a major long-term economic impact, it does create short-term data gaps. Key government reports, such as employment figures and wage data, won’t be released until operations resume, leaving markets with less real-time insight into economic conditions. The latest available labor data suggests that job openings and unemployment are roughly balanced, indicating a stable employment environment. Hiring and layoffs appear to have slowed, suggesting companies are content with current staffing levels. However, once the shutdown ends, there could be temporary distortions in the data. During the 2013 shutdown, some government workers were classified as unemployed despite being paid later for the furlough period. A similar classification could lead to a short-term spike in unemployment figures when new data is released. Investors should be cautious not to overreact; such increases are likely statistical artifacts rather than signs of true weakness.
Greg Powell, CIMA®
President and CEO
Wealth Consultant
Email Greg Powell here
Bobby Norman, CFP®, AIF®, CEPA®
Managing Director
Wealth Consultant
Email Bobby Norman here
Trey Booth, CFA®, AIF®
Chief Investment Officer
Wealth Consultant
Email Trey Booth here
Ty Miller, AIF®
Vice President
Wealth Consultant
Email Ty Miller here
Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Economic forecasts set forth in this presentation may not develop as predicted.
No strategy can ensure success or protect against a loss.
Stock investing involves risk including potential loss of principal.
Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.
The post October Markets: Trick or Treat? first appeared on Fi Plan Partners.
