Econified

Now that the stock market has been closed for the week, let’s look at how some major indexes performed:

• S&P 500 Index – down 0.76%
• Nasdaq Composite – down 1.95%
• Dow Jones Industrial average index – up 0.11%
• Russell 2000 Index – down 2.59%

These changes are not drastic, but it does signal an overall decrease in investor confidence in the overall stock market. So, what happened this week to bring about these changes?

The stock market surged early in the week due to U.S. government reopening. The longest U.S. government shutdown in history has had minimal effects on the overall stock market due to shutdowns having mostly temporary impacts on the private sector. However, reopening allows the federal government to spend money again which will stimulate the economy. This rise in stock prices did not last long though because Neel Kashkari, the president of the Minneapolis Federal Reserve bank, said in an interview on Thursday that he did not support the Fed’s interest-rate cut in October. Since the presidents of the federal reserve banks have a large say on economic policy, this makes it more likely that there will not be a rate cut in December.

Interest rate cuts, which come as a result of the Federal Reserve using its monetary policy tools to lower the Federal Funds Rate, can be very lucrative for businesses. As it becomes cheaper to borrow money, companies grow faster. The next lowering of the federal funds rate was expected to come at the December meeting, but it no longer looks like this is likely. The market responded with a large drop in value across the entire economy. However, most stocks somewhat rebounded on Friday, which brings the stock prices up to what we see above.

Industry Changes

Pharmaceuticals: The Pharmaceuticals industry, tracked using Dow Jones’ U.S. Pharmaceuticals Index (DJUSPR), had a monumental week. The overall industry index rose 7.1% last week. This can be attributed to strong earnings from pharmaceutical companies, and the recent pause of President Trump’s tariff policies which could signal stronger growth for the industry.

Financial Services: The Financial Services industry, tracked using Dow Jones’ U.S. Financial Services Index (DJUSFV), had a week that largely resembled the overall market with a loss of 1.3% last week. This signals that banking and the overall financial service sector of the economy is negatively affected by the decreased likelihood of a December interest rate cut.

Technology: The Technology industry, tracked using Dow Jones’ US Technology Index (DJUSTC), performed about the same as the market did with being down 1.76% this past week. The technology industry is more reliant on lower interest rates as this industry is known for large growth. Growth oftentimes requires borrowing money, something that is more affordable when interest rates decrease. A decrease in US interest rates would benefit this industry more than most others, so the news this week hit this industry harder.

Consumer Goods: The Consumer Goods industry, tracked using Dow Jones’ US Consumer Goods Index (DJUSNC), also slipped this week with a decrease of 2.19%. The industry has had a rough past month due to increased costs resulting from the global tariffs, and the industry continues to slip as more companies report lower than expected earnings. This slump can be attributed to lessening in discretionary spending and poor individual stock performance.

Oil & Gas: The Oil & Gas industry, tracked using Dow Jones US Oil & Gas Index (DJUSEN), has performed well and rose 2.35% this week. This is resulting from increased domestic oil production with businesses in the industry reporting strong Q3 production growth despite the falling price of oil in 2025. Oil prices remained steady this week, and a change in the price will result in a shift in the industry. With crude oil prices at a low price historically, there could be considerable growth in the industry if oil prices rise to past levels. This may be a factor in this week’s performance.

Parting Thoughts

This week certainly had its ups and downs for the stock market. With most companies reporting their Q3 earnings in late October to early November, it is interesting to see which industries and companies are poised for growth. The Oil & Gas industry remains a highlight in the stock market reflecting increased production growth despite the great decrease in crude oil prices under President Trump.

A single stock I would look out for is Pfizer. The Pharmaceuticals industry had a monumental week, showing strong growth and future prospects. Pfizer, a leader in the industry, settled a $10B deal this week to purchase Metsera, signaling that Pfizer is looking to be more involved in the obesity drug market. This is an acquisition to be aware of as the favorable industry conditions and Pfizer’s strong market power could allow Pfizer to fully capitalize on this merger.

Keep an eye out for more Econified posts next week to keep you informed on the Economy!