October 10, 2025

WEEKLY TOUCHPOINT

5 forces could stimulate the U.S. economy

Despite early fears of recession following President Trump’s sweeping tariffs, the U.S. economy has shown surprising grit. While job growth and consumer spending have softened, investors are starting to see glimmers of momentum returning. Capital Group’s outlook spotlights five tailwinds that could keep America’s economic engine humming:

1. A Dovish Fed Turns on the Juice

• The Fed’s recent pivot to rate cuts — with more expected through 2028 — signals a clear shift toward growth support.
• Lower borrowing costs could fuel housing, autos, and consumer spending, benefiting companies like Home Depot and Sherwin-Williams.
• Historical data shows markets tend to rally following mid-cycle rate cuts, with average S&P 500 gains near 28%.
• The caveat: long-term yields must cooperate — higher Treasury rates could still blunt the effect.

2. The “One Big Beautiful Bill” Stimulus

• The new tax package includes retroactive cuts for 2025 and over $200 billion in refunds set to hit mailboxes in early 2026 — effectively a one-time national “stimulus check.”
• Businesses get to expense R&D and factory investments immediately, boosting cash flow for tech and defense firms.
• Clean energy and health subsidies were rolled back, adding political friction and longer-term debt concerns.

3. Deregulation and the Comeback of the Forgotten Sectors

• A regulatory rollback could benefit industries left out of the AI boom — namely energy, industrials, and telecoms.
• Looser bank restrictions may jumpstart lending and M&A activity (think Wells Fargo, Union Pacific, and Charter/Cox).
• But fewer watchdogs mean investors need to stay sharp as consolidation reshapes market dynamics.

4. Defense Spending Goes Global

• NATO allies’ commitment to lift defense budgets from 2% to 5% of GDP by 2035 marks a generational shift.
• American defense giants like RTX and Northrop Grumman are positioned to benefit from rising international demand.
• European defense leaders such as Rheinmetall are already reporting record backlogs — signaling a long runway for growth.

5. AI: Still in the Early Innings

• AI-related investment now accounts for 7.5% of U.S. GDP, surpassing the dot-com era.
• Widespread adoption promises major productivity gains — but also winners and losers across industries.
• Expect waves of excitement followed by growing pains as innovation and market expectations collide.

The Takeaway

America’s economy faces crosscurrents — from tariffs and inflation to new tech frontiers and global defense realignments. Yet, resilience remains the recurring theme. As Capital Group’s Cheryl Frank puts it:

“Even when markets get a little too excited or fearful, discipline and a focus on fundamentals help navigate the volatility.”

In short: stay invested, stay patient — this cycle may still have more to give.

 

Read the full article from Capital Group

 

• Bummed Consumers Predict Shrinking Labor Market, Spiking Inflation

• Can the Stock Market Predict the Future?

• This Is How the AI Bubble Will Pop

• Private Credit: Dispelling the Myths

• Crypto Stocks and Currencies Earn Their Own S&P Index

• Americans increasingly see legal sports betting as a bad thing for society and sports

• A quarter of U.S. consumers are now financing groceries with buy-now, pay-later 

• Gold price reaches $4,000 an ounce for the first time ever

• IMF and Bank of England join growing chorus warning of an AI bubble

• Trump’s New China Tariff Threat Halts Markets’ Optimistic ‘Melt-Up’

 

How Must I Take Distributions From The Roth IRA I Inherited?

Inherited Roth IRAs can trip up even seasoned investors — and the rules aren’t quite what they used to be. Unlike Traditional IRAs, Roths are free from required minimum distributions (RMDs) during the owner’s lifetime, but once inherited, the playbook changes. The SECURE Act rewrote the rules, and clarity is key.

Our latest guide helps simplify the decision tree when handling an inherited Roth IRA. Key considerations include:

• Beneficiary Type Matters: Knowing whether you’re an Eligible Designated Beneficiary or Non-Eligible Designated Beneficiary determines how long you can stretch distributions.

• The 10-Year Rule in Focus: Understanding who it applies to — and when exceptions apply — can prevent costly mistakes.

• RMD Requirements: Not all inherited Roths are the same. The timing of distributions may hinge on whose life expectancy governs the payout.

• Planning Implications: Coordinating distributions with broader estate, tax, and cash flow goals can help preserve tax-free growth longer.

In short, inherited Roth IRAs reward those who know the rules. Our flowchart helps map them out clearly — because when the IRS changes the maze, it pays to have a guide.

 

DOWNLOAD our guide

Source: fp Pathfinder

Equities

• Stocks stumbled as U.S.–China trade tensions reignited, erasing early-week gains after President Trump threatened new tariffs.

• Large-cap and growth stocks held up better than small and value names, reflecting a defensive tilt among investors.

• Nine of eleven S&P 500 sectors finished lower; only consumer staples and utilities eked out modest gains.

• Energy led the declines, sliding nearly 4% as oil prices dipped below $60 per barrel.

• Foreign markets also fell, though they managed to outperform U.S. equities despite a stronger dollar.

Bonds

• Treasury yields slipped, with the 2-year at 3.52% and 10-year at 4.05%, narrowing the yield curve to 0.53%.

• Government bonds outperformed corporates as investors sought safety amid market volatility.

• Investment-grade yields edged down to 4.78%, while high-yield jumped to 7.28%, reflecting wider credit spreads and risk aversion.

• Overall, bond markets sent a mixed signal—part flight to quality, part anxiety about credit conditions.

Macroeconomic Data

• The government shutdown limited new data releases, shifting focus to the Fed’s September minutes, which revealed a split over future rate cuts.

• The University of Michigan sentiment index held steady at 55.0, balancing optimism in current finances with caution toward big-ticket purchases.

• Inflation expectations ticked slightly lower to 4.6% (1-year), while long-term expectations held at 3.7%.

• Used vehicle prices climbed again—up 2% in September, marking six straight months of gains, led by luxury and EV models.

(as of Monday’s Market Opening)

	Total Return (1D)	Total Return (1W)	Total Return (MTD)	Total Return (QTD)	Total Return (YTD)
S&P 500	1.54%	-1.29%	-0.52%	-0.52%	13.12%
Dow Jones Industrial Average	1.09%	-1.54%	-0.91%	-0.91%	8.07%
NASDAQ	2.04%	-1.24%	-0.01%	-0.01%	17.34%
NASDAQ 100	2.14%	-0.95%	0.24%	0.24%	17.74%
Russell 1000	1.49%	-1.02%	-0.48%	-0.48%	13.80%
Russell 2000	2.23%	-1.12%	0.47%	0.47%	10.88%
Russell 3000	1.51%	-1.01%	-0.53%	-0.53%	13.64%
ACWI	1.47%	-1.29%	-0.39%	-0.39%	18.10%

 

The Four Cs of Business Value

When it comes to growing and eventually transitioning a business, the true drivers of value aren’t just on the balance sheet — they’re built into the culture and structure of the company. The Exit Planning Institute defines these as the Four Cs: Human, Structural, Customer, and Social Capital. Together, they form the foundation of the Value Acceleration Methodology™ and determine how transferable — and therefore how valuable — a company really is.

• Human Capital – Your people. It’s the leadership bench, talent depth, and ability to execute without the owner at the center.

• Structural Capital – Your systems. This includes documented processes, technology, intellectual property, and the repeatable methods that allow consistent performance.

• Customer Capital – Your relationships. It’s about diversification, loyalty, and the predictability of future revenue.

• Social Capital – Your culture. This represents trust, communication, and shared purpose across the organization — the “glue” that holds everything together.

Businesses that intentionally develop all four areas build strength, resilience, and attractiveness to future buyers or successors. Owners who focus only on profits often miss the real wealth locked inside these intangible assets.

In short: Profit today is good. Transferable value tomorrow is better. The Four Cs show where to invest time and attention to ensure your business — and your legacy — continues to thrive.

 

SOURCE: The Exit Planning Institute

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Disclosures

1. Wealth Mechanics™ is a registered trademark of Cestia Wealth Management. Unauthorized use of the trademark, including but not limited to commercial use, reproduction, or imitation without explicit written permission from Cestia Wealth Management, is strictly prohibited.
2. Market commentary provided by NewEdge Advisors
3. Charts concerning market data are provided by Exhibit A.
4. Guides and other downloadable firm material respective to financial planning processes and data are provided and powered by fpPathfinder.
5. Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. Securities offered through NewEdge Securities, LLC. Member FINRA/SIPC. NewEdge Advisors, LLC and NewEdge Securities, LLC are wholly owned subsidiaries of NewEdge Capital Group, LLC.
6. Cestia Wealth Management is not a legal tax professional. We offer tax gap analysis for clients who desire to have a comprehensive financial plan, which requires in-depth tax strategy and planning as a distinct part of the overall customized solution. Please consult your tax professional on all matters addressed in this report.
7. Information about annuities are not to be considered a recommendation. The information provided should not considered a recommendation to purchase or sell any particular security.
8. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results. Please note that individual situations can vary. Therefore, the information presented here should only be relied upon when coordinated with individual professional advice.