A 10–2 vote to hold rates. A late-month technology sell-off. A 10-year Treasury that pulled back from a 12-month high. And inflation still running above the Fed's goal. Here is what happened in October and what it can mean for a retirement plan.
Sources: S&P Dow Jones Indices, Nasdaq and Dow Jones via FRED; U.S. Department of the Treasury; Federal Reserve. Index figures are price returns from the Sept. 30 close to the Oct. 30 close (the last trading day of October) and exclude dividends. Past performance is not indicative of future results.
Most of October's decline came late in the month. The S&P 500 reached its October high of 7,818.93 on October 6, then drifted lower. On October 30, the last trading day of the month, the S&P 500 fell 1.8 percent and the Nasdaq Composite fell 2.9 percent, as investors reacted to quarterly results and spending plans from several large technology companies. The Dow Jones Industrial Average fell 1.1 percent that day but still finished the month 1.7 percent higher.
Through the end of October, all three major indexes remained higher for the year. The table below compares the September 30 and October 30 closes. The chart that follows shows each month of 2026 for the S&P 500, which puts one month in the context of the full year. For the prior month, see our September 2026 market commentary.
| Index | Sept. 30 Close | Oct. 30 Close | October | 2026 YTD |
|---|---|---|---|---|
| S&P 500 | 7,651.54 | 7,580.07 | −0.9% | +10.7% |
| Dow Jones Industrial Average | 50,906.05 | 51,770.31 | +1.7% | +7.7% |
| Nasdaq Composite | 26,861.06 | 25,437.00 | −5.3% | +9.4% |
Price returns only, excluding dividends. YTD measured from the Dec. 31, 2025 close. Sources: S&P Dow Jones Indices (S&P 500, Dow Jones Industrial Average) and Nasdaq OMX Group (Nasdaq Composite), via FRED, Federal Reserve Bank of St. Louis. Indices are unmanaged and cannot be invested in directly. Past performance is not indicative of future results.
Market swings also showed up in the Cboe Volatility Index (VIX), a measure of expected stock market volatility. It rose from 16.34 at the end of September to 19.42 on October 30.
At its October 27–28 meeting, the Federal Open Market Committee kept the federal funds target range at 3.75 to 4.00 percent. The vote was 10–2. Lisa D. Cook and Beth M. Hammack dissented; the statement says they preferred to raise the range by another quarter point. The hold followed the Committee's unanimous 12–0 vote on September 16 to raise rates by a quarter point.
The Fed's statement described the economy this way: "Economic activity is expanding at a strong pace." It also said plainly, "Inflation remains elevated," and noted that "the accumulation of more information will help the Committee determine the policy stance appropriate" to return inflation to its 2 percent goal. The chart below shows how the target range has moved since the fall of 2025.
| October 27–28, 2026 FOMC Decision | |
|---|---|
| Decision | Hold (no change) |
| Target Range | 3.75% to 4.00% |
| Vote | 10–2 |
| Dissents | Cook and Hammack, who preferred a 0.25 point increase |
| Prior Move | Sept. 16, 2026: +0.25 point (12–0) |
| Next FOMC Meeting | December 8–9, 2026 (includes economic projections) |
Source: Federal Reserve, FOMC statements of Sept. 16 and Oct. 28, 2026, and 2026 meeting calendar.
The federal funds rate mostly affects short-term rates. Yields on savings accounts, money market funds and short-term CDs tend to follow it, and so does the cost of variable-rate borrowing such as credit cards and home equity lines. A hold means those short-term rates generally stay near where they were after the September increase.
For retirees who keep a cash reserve for near-term spending, this is useful context when reviewing how much is set aside and what it earns. Short-term yields can change after any Fed meeting, so a plan that depends on today's cash yields lasting is more fragile than one that does not.
The 10-year Treasury yield closed at 5.31 percent on October 5, its highest close of the past 12 months, then moved lower for much of the month. It ended October at 4.94 percent, down from 5.29 percent at the end of September. The 2-year yield fell from 4.88 percent to 4.56 percent over the same period, and the 30-year yield closed October at 5.31 percent, down from 5.64 percent.
| Treasury Yield | Sept. 30 | Oct. 30 | Change |
|---|---|---|---|
| 3-Month | 4.20% | 4.16% | −0.04 |
| 2-Year | 4.88% | 4.56% | −0.32 |
| 10-Year | 5.29% | 4.94% | −0.35 |
| 30-Year | 5.64% | 5.31% | −0.33 |
Daily Treasury par yield curve rates, percent; change in percentage points. Source: U.S. Department of the Treasury.
Mortgage rates eased as well. Freddie Mac's average 30-year fixed rate was 7.24 percent in the week of October 29, down from 7.40 percent in mid-October. The chart below shows the full 12-month path of the 10-year yield.
Bond prices and yields move in opposite directions. When yields fall, prices of existing bonds generally rise, and when yields rise, prices generally fall. Longer-maturity bonds tend to move more than shorter ones. That is why the bond portion of a statement can look different from month to month even when nothing in the portfolio has changed.
For retirement income, two numbers matter: the price of the bonds you already own and the yield available on new money as bonds mature. A month like October changes both. Understanding how your plan uses each is more useful than reacting to a single month's move.
The Consumer Price Index for September, released October 14, rose 0.6 percent for the month and 3.7 percent from a year earlier, up from 3.4 percent in August. Core CPI, which excludes food and energy, rose 0.3 percent for the month and 2.6 percent from a year earlier. Energy was the largest driver: the energy index was up 20.4 percent over 12 months, including a 34.2 percent rise in gasoline. Food prices were up 2.5 percent and shelter was up 3.2 percent.
The Fed's preferred gauge told a similar story. On October 29, the Bureau of Economic Analysis reported that the PCE price index rose 3.6 percent from a year earlier in September, and core PCE rose 3.1 percent. Both remain above the Fed's 2 percent longer-run goal. Oil prices stayed high as well: the spot price of West Texas Intermediate crude reached $110.01 per barrel on October 19 and was $103.37 on October 27, the latest daily price available from the U.S. Energy Information Administration when this was written.
Retirees often feel inflation first in the budget lines that move the most, such as fuel and utilities. The index used to calculate Social Security cost-of-living adjustments, CPI-W, was up 3.9 percent from a year earlier in September.
Over a retirement that can last 20 to 30 years, the inflation assumption in a plan matters as much as the return assumption. A plan that is reviewed against a range of inflation outcomes, rather than a single guess, tends to hold up better when readings like September's arrive.
The first estimate of third-quarter gross domestic product, released October 29, showed real GDP growing at an annual rate of 3.4 percent, up from 2.2 percent in the second quarter. The labor market looked quieter. The September jobs report, released October 2, showed employers added 29,000 jobs, and the unemployment rate was 4.2 percent. Average hourly earnings were up 3.0 percent from a year earlier. Revisions lowered July to a loss of 10,000 jobs and raised August to a gain of 133,000.
Strong growth, slower hiring and inflation above target is the mix the Fed is weighing. It helps explain why the Committee chose to wait for more information in October rather than move again.
November opened with continued volatility. On November 2, the first trading day of the month, the Dow closed at 51,983.98, the Nasdaq Composite closed at 25,164.36, and the VIX rose to 21.15. The 10-year Treasury yield was 4.91 percent. U.S. midterm elections were held on Tuesday, November 3. Our earlier post on midterm elections and the stock market looks at how markets have historically behaved around election season.
The next Federal Reserve meeting is December 8–9, and it will include the Committee's updated economic projections. We will cover November's data in next month's commentary.
The following is provided for informational context only and does not represent a forecast or prediction of market performance.
Months like October are a reminder that markets rarely move in a straight line. Scripture encourages a steady kind of attention: "Know well the condition of your flocks, and give attention to your herds" (Proverbs 27:23, ESV). For a retirement plan, that means knowing what you own, why you own it, and how it supports the income you need, so that one month's headlines do not have to drive decisions.
This commentary is educational and is meant to give context, not individual advice. Thank you for the trust you place in us. Please reach out at any time if you have questions or if anything here prompts a conversation you would like to have.
I'm Will Snodgrass, CFP®, with Matt25 Capital, serving Christian pre-retirees and retirees from our office in The Woodlands, Texas, and by video with clients nationwide. Advisory services are available only where Will is properly registered or exempt from registration.
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