Weekly Market Commentary -  October 27, 2025

Week In Review

A subdued inflation report and the probability of another Fed interest rate cut fueled market optimism,

driving U.S. equity indices to record highs. The delayed September CPI release showed inflation rose 3.0% from a year ago, less than expected. The lower figure, along with constructive trade rhetoric and robust corporate earnings, sparked a risk-on attitude. The S&P 500 closed the week at an all-time high of 6,791, surging +1.9%.

This Week

The highlight will be the FOMC interest rate decision and post-meeting presser with Federal Reserve Chairman Jerome Powell. Since inflation was lower than expected and the risk has shifted to a slowing labor market, a 25-basis-point cut to the federal funds rate is widely expected. The earnings season deepens with results for 175 S&P 500 companies, including AI pacesetters Apple, Microsoft, Meta, Alphabet, and Amazon. 3

Portfolio Themes

Asset managers are updating long-term capital market assumptions for 2026 to help align strategic

asset allocation decisions with evolving risk. Bond returns are historically attractive due to higher starting yields and despite extraordinary valuations, global equity returns appear stable due to greater operational efficiency and expanding corporate profitability. Nonetheless, traditional stock and bond correlations have been positive. According to JPMorgan, the standard 60% equity and 40% bond portfolio that includes an allocation of just 10% to diversified alts has the potential to boost the Sharpe ratio by more than 8% versus a traditional 60/40. 4 More importantly, lower asset correlation means reduced portfolio volatility and this may help clients stay committed to their financial plans. Simplicity Wealth’s Multi-Manager Model Suite enables advisors to choose from diversified and select alternative assets to meet specific client goals while preserving the integrity of the original model risk profile.

_______________________________________

Data: Unless otherwise noted, data for charts, graphs, and tables is sourced from YCharts. Portfolio Themes idea sourced from J.P. Morgan Asset Management.

1Style box returns use various Russell indices tied to specific areas of the market cap (vertical) and style (horizontal) spectrums. Indices are not typically available for direct investment, are unmanaged, and do not incur fees or expenses.

2 Index Statistics: P/E Ratio – Displays the forecasted P/E ratio of the representative index ETF. Yield - Dividend-per-share divided by current share price. Table statistics are updated weekly. MSCI indices represent broad global and international equity markets. Indices are represented by iShares ETF proxies (IVW, IVV, IVE, ACWI, and ACWX).

3 FactSet.

4 JPMorgan Asset Management. Past performance does not guarantee future results.

Weekly commentary and investment advisory services are provided by Simplicity Wealth, LLC a SEC Registered Investment Adviser. Registration does not imply a certain level of skill or training. The information provided is for informational purposes only and does not constitute any form of advice or recommendation. The information contained within has been obtained from various sources and is believed to be accurate at the time of publication.