Relief Rally Fueled by Cooling Yields and Steady CPI
After weeks of volatility, equities rebounded last week, supported by falling Treasury yields and inflation data that met expectations. The S&P 500 rose 0.7%, the NASDAQ gained 1.6%, and the Dow added 0.8%.
The 10-year U.S. Treasury yield declined to 4.62%, down from recent highs above 4.75%. The move provided breathing room for interest rate–sensitive sectors, especially technology and small-cap stocks, which led the week’s gains.
CPI Data Aligns with Forecasts
The Consumer Price Index (CPI) rose 0.4% month-over-month in September, with core CPI at 0.3%, both meeting expectations. Shelter and gasoline remained primary contributors to headline inflation, though medical services inflation showed signs of easing.
This stability in inflation provided reassurance to markets, helping counterbalance recent uncertainty about the Federal Reserve’s interest rate trajectory.
Sector Rotation Shifts Again
Technology and small-cap stocks were among the week’s strongest performers, regaining ground after recent underperformance. Energy and financials, which had led in prior weeks, lagged as yields declined. International equities continued to face headwinds, with both developed and emerging markets posting modest losses.
Alphastar CIO Tony Parish noted:
“Markets were oversold coming into the week, so the combination of stable inflation and lower yields sparked a relief rally”
Here are three key considerations for investors:
-
Yield Relief May Be Temporary
The pullback in Treasury yields supported equities this week, but markets remain sensitive to inflation and policy signals. Continued Fed vigilance may keep yields elevated.
-
Sector Leadership Is Rotating
The shift back toward tech and small caps suggests that investors are reacting to yield movements in real time. Staying diversified across sectors may help manage these transitions.
-
Inflation Trends Still Matter
While CPI came in as expected, shelter and energy remain elevated. Markets will continue to watch how inflation components evolve through Q4.
Final Thoughts
Last week’s market rebound was a welcome shift following recent drawdowns. Although inflation data didn’t surprise to the downside, its stability—paired with lower yields—provided investors with short-term relief.
Tony Parish summed it up clearly:
“Even in a choppy environment, it’s clear that markets are reacting quickly to policy and inflation signals.”
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Disclosure:
This blog post is for informational purposes only and should not be considered investment advice. Past performance does not guarantee future results. All data is as of October 13, 2025. Please consult with a qualified financial professional for personalized advice.
Stocks Bounce Back as Yields Ease: Week of October 13, 2025
Relief Rally Fueled by Cooling Yields and Steady CPI
After weeks of volatility, equities rebounded last week, supported by falling Treasury yields and inflation data that met expectations. The S&P 500 rose 0.7%, the NASDAQ gained 1.6%, and the Dow added 0.8%.
The 10-year U.S. Treasury yield declined to 4.62%, down from recent highs above 4.75%. The move provided breathing room for interest rate–sensitive sectors, especially technology and small-cap stocks, which led the week’s gains.
CPI Data Aligns with Forecasts
The Consumer Price Index (CPI) rose 0.4% month-over-month in September, with core CPI at 0.3%, both meeting expectations. Shelter and gasoline remained primary contributors to headline inflation, though medical services inflation showed signs of easing.
This stability in inflation provided reassurance to markets, helping counterbalance recent uncertainty about the Federal Reserve’s interest rate trajectory.
Sector Rotation Shifts Again
Technology and small-cap stocks were among the week’s strongest performers, regaining ground after recent underperformance. Energy and financials, which had led in prior weeks, lagged as yields declined. International equities continued to face headwinds, with both developed and emerging markets posting modest losses.
Alphastar CIO Tony Parish noted:
Here are three key considerations for investors:
Yield Relief May Be Temporary
The pullback in Treasury yields supported equities this week, but markets remain sensitive to inflation and policy signals. Continued Fed vigilance may keep yields elevated.
Sector Leadership Is Rotating
The shift back toward tech and small caps suggests that investors are reacting to yield movements in real time. Staying diversified across sectors may help manage these transitions.
Inflation Trends Still Matter
While CPI came in as expected, shelter and energy remain elevated. Markets will continue to watch how inflation components evolve through Q4.
Final Thoughts
Last week’s market rebound was a welcome shift following recent drawdowns. Although inflation data didn’t surprise to the downside, its stability—paired with lower yields—provided investors with short-term relief.
Tony Parish summed it up clearly:
READ THE FULL REPORT
Disclosure:
This blog post is for informational purposes only and should not be considered investment advice. Past performance does not guarantee future results. All data is as of October 13, 2025. Please consult with a qualified financial professional for personalized advice.