October has a reputation — and not just for haunted houses and plastic pumpkins. It’s the month that brought us some of history’s ugliest market crashes: 1929, 1987, 2008… you get the idea. Traders even call it the October Effect, as if the market itself puts on a costume and tries to scare everyone.

But this year, the fear factor isn’t coming from ghosts or ghouls — it’s coming from the Fed, inflation, and a job market that’s starting to lose steam. So, as we creep toward Halloween 2025, the big question is: will investors get tricked, or treated?

👻 The Fed’s Balancing Act: Trick or Treat?

All eyes are on the Federal Reserve’s October 28–29 meeting, where markets are widely expecting a 0.25% rate cut — the first in several months. But this isn’t your classic “pivot and party” moment.

Some Fed officials have hinted they might pause their balance-sheet runoff (QT) or even end it, citing turbulence in short-term funding markets. Others are worried that inflation’s still too sticky to declare victory.

If the Fed cuts but stays hawkish in tone, that’s a trick — the kind that spooks stocks and keeps investors on edge.
If they hint that more cuts are on the table, that’s the treat — markets will likely cheer, even if the candy’s sugar-free.

🕸 Inflation, Jobs, and the Data Fog

Inflation is cooling but not defeated. Consumer prices remain above the Fed’s 2% comfort zone, and with parts of government data collection delayed by the recent shutdown, traders are flying half-blind into the next CPI and jobs reports.

The labor market is also flashing amber. The latest Fed Beige Book shows hiring has slowed across multiple regions, with more employers relying on attrition instead of layoffs. It’s not a collapse, but it’s definitely not the “hot jobs market” narrative of 2022–2023.

If the next jobs report underwhelms, expect volatility to rise — the kind of jump that makes you check your portfolio like you heard a noise in the dark.

🦇 Earnings Season: Enter If You Dare

Earnings season is another dark corridor in this haunted mansion. Big Tech names are under pressure to justify sky-high valuations, especially with the “AI trade” showing early cracks.

A few disappointing reports could easily send shockwaves through the indexes. Wall Street strategists are also watching for weakness in consumer-facing sectors — if spending slows, it’ll confirm the inflation fatigue many households are already feeling.

💀 The Scary Scenarios Lurking Around the Corner

Let’s call out the monsters by name:

• The Inflation Goblin – CPI surprises higher → Fed hesitates → yields spike → equities tumble.
• The Jobs Poltergeist – Payrolls disappoint → recession chatter → consumer confidence fades.
• The Earnings Exorcism – Tech misses → sentiment craters → rotation out of growth.
• The Data Darkness – Missing or delayed reports keep investors guessing → volatility feeds on uncertainty.

In short: a few bad headlines could turn this October into a full-blown horror flick.

🕯 But Not All Shadows Hide Monsters

There are bright spots amid the fog:

• Inflation is trending lower overall.
• The Fed seems prepared to step in if the market gets too jittery.
• Earnings in defensive and dividend-paying sectors have held up surprisingly well.
• And history shows October often ends with rallies once early fears fade — the so-called “Halloween effect” that marks the start of the market’s stronger seasonal period.

If the data cooperates and the Fed strikes the right tone, we could see this spooky month end with more treats than tricks.

🎃 Final Word: Keep the Flashlight Handy

Whether October ends with a fright or a sigh of relief, it’s a reminder that markets, like haunted houses, thrive on emotion.

Stay calm. Stay diversified. Don’t let the first creak in the floorboards send you running.

Because when fear rises, opportunity often follows — you just have to be the one holding the flashlight when everyone else runs screaming.

Written by Anthony Guetzoian, Broker/Owner of CENTURY 21 Valley Properties. Anthony brings over 30 years of industry experience helping clients navigate markets with clarity, strategy, and confidence.

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Title: Will October Haunt the Markets? 🎃

October has a spooky track record for investors — think 1929, 1987, 2008. But in 2025, it’s not ghosts we’re worried about. It’s the Fed, inflation, and a job market losing its edge.

Here’s what’s haunting Wall Street right now:

• The Fed is expected to cut rates by 0.25% later this month, but inflation’s still being stubborn.
• The job market is cooling, raising fears of an economic slowdown.
• Earnings season could expose cracks in the AI-driven rally.

Scary? Sure. But remember — not every shadow hides a monster.
If inflation keeps easing and the Fed delivers the right tone, October could end with more treats than tricks.

Markets love to play dress-up this time of year — just make sure your portfolio doesn’t get caught without a costume.

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💼 Anthony Guetzoian
Broker/Owner – CENTURY 21 Valley Properties
30+ years guiding LA & Ventura County clients through market highs, lows, and everything in between.