Next Week’s US Stock Market Outlook: Inflation Data in Focus (10.27~10.31, 2025)
The US stock market is gearing up for another week of trading, following a week of modest gains across major indices. The S&P 500 (SPY) closed at $677.25 (+0.12%), the NASDAQ (QQQ) at $617.1 (+0.18%), and the Dow Jones (DIA) at $472.21 (+0.47%). Next week, investors will be laser-focused on incoming inflation data and its implications for the Federal Reserve’s monetary policy. The performance of key tech stocks will also be closely monitored. Will the market maintain its upward trajectory, or will economic data trigger a shift in sentiment?
Inflation Data and Fed Policy
All eyes will be on the latest inflation figures, as they will heavily influence expectations for future Fed rate decisions. Stronger-than-expected inflation could prompt the Fed to maintain its hawkish stance, potentially leading to market volatility. Conversely, weaker inflation data might fuel hopes for a policy pivot, boosting risk assets. Keep a close watch on the CPI and PPI releases.
Chart: Inflation Rate vs. Fed Funds Rate
Tech Stock Performance
Tech stocks continue to be a major driver of market performance. Amazon (AMZN) closed at $224.21 (+1.01%), showing positive momentum. Apple (AAPL) also saw gains, closing at $262.82 (+0.62%). However, Tesla (TSLA) faced headwinds, closing at $433.72 (-2.93%). Microsoft (MSFT) showed modest gains, closing at $523.61 (+0.16%), while Google (GOOGL) closed at $259.92 (+1.30%).
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Chart: 5-day % change for FAANG stocks
Geopolitical Risks
Geopolitical tensions remain a persistent concern for investors. Developments in Eastern Europe, as well as tensions in Asia, could trigger risk-off sentiment and impact market performance. Keep an eye on news headlines and assess their potential impact on global supply chains and investor confidence. Additional data confirmation may be useful.
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Chart: Global Risk Index
Technical Summary
- S&P 500: Trading near resistance, watch for a breakout or pullback.
- NASDAQ: Showing relative strength, supported by tech sector gains.
- Dow Jones: Lagging behind other indices, potential for catch-up.
- Investment Posture: Maintain a neutral to slightly bullish stance, with a focus on risk management.
Conclusion
Here’s a quick forecast for next week:
- S&P 500: 670 – 690
- NASDAQ: 610 – 630
- Dow Jones: 465 – 480
Key risks to watch out for next week include:
- Unexpectedly high inflation data
- Escalation of geopolitical tensions
- Negative earnings surprises from major corporations
Overall Sentiment:
Overall Sentiment:
