How are we enjoying the “normal seasonal soft patch” so far?
The stock market spent the past week chopping around the range left by the sharp drop the prior Friday, while confronting the ghosts of crises past: regional-bank balance-sheet worries, possible re-escalation of China trade hostilities, a crypto flash correction and a reversal in the most speculative and fundamentally flimsy stocks.
The S&P 500 managed a 1.7% weekly gain, almost all of it coming from Monday’s reflex rebound, carving out what now amounts to a five-week trading range bounded by the all-time high above 6,750 and the twice-tested low of 6,550.
Entering last week, nearly early everyone lining up behind the consensus bullish argument pointed to the AI-investment bonanza, a Federal Reserve poised to cut rates twice more this year into a still-firm economy and the heaven-bestowed right to a year-end performance-chasing rally. Along with these hard-to-dispute premises would come the standard disclaimer that one should be ready for some October volatility along the way.
We’ve now had some of that, though the net effect so far is the mildest of pullbacks, just shy of 3% at the worst from a record high. But last week saw an observable upwelling of anxiety, reflecting a break of the preceding low-volatility climb and some possible pent-up selling from historically elevated equity allocations.
Source: https://www.cnbc.com/2025/10/18/bank-worries-china-trade-feud-unnerves-stock-market-typical-october-volatility-or-something-bigger.html