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Markets Gain
The U.S. stock market’s recent upward trend was interrupted after a sell-off on Friday left the S&P 500 down 2.4% for the week and sent the index to just its third negative result out of the past 10 weeks. The NASDAQ finished down 2.5% and the Dow ended 2.7% lower.
The S&P 500 had been on course for a modest weekly gain until midday Friday, when escalating tensions between the United States and China sent the index down 2.7% for the day. President Trump announced that he was considering a further tariff increase on Chinese imports and said there was “no reason” to keep a previously scheduled meeting with China’s leader. The president cited new restrictions that China imposed on its export of rare earth minerals.
The price of U.S. crude oil sank more than 5% on Friday following President Trump’s threat about the prospect of higher tariffs on imports from China. In afternoon trading, oil was trading around $58 per barrel, the lowest level in more than five months. Concerns about a potential global oversupply have recently weighed on oil prices.
Although the U.S. government shutdown continued to delay the release of economic reports, it didn’t stop the U.S. Federal Reserve from releasing minutes from the recent meeting at which it cut its benchmark rate by a quarter point. Wednesday’s release reaffirmed investor expectations for further cuts before year end, as a majority of Fed members cited risks that labor market conditions could weaken further without additional rate cuts.
The growth rate for dividend payments by U.S. companies accelerated in this year’s third quarter. The $10.6 billion in net dividend increases recorded by companies in the S&P 500 was well above the previous quarter’s $7.4 billion, according to S&P Dow Jones Indices, which said it expects full-year dividend increases to climb to a record level in 2025 with a forecast for a nearly 6% rise over 2024.
As major U.S. banks prepared to open quarterly earnings season on Tuesday, analysts were forecasting that third-quarter earnings for all companies in the S&P 500 rose by an average of around 8.0% overall, according to FactSet. A positive result would mark the ninth consecutive quarter of year-over-year earnings growth.
Source: John Hancock Investment Management
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The Internal Revenue Service has officially rolled out the 2026 tax‑year adjustments, setting new inflation‑indexed income brackets, updated standard deductions, and revisions to more than 60 tax provisions. Under the changes, married couples filing jointly will see their standard deduction increase to $32,200, while single filers’ deduction will rise to $16,100. Meanwhile, the top marginal tax rate remains at 37%, applying to individuals earning above $640,600 and joint filers above $768,700, with all other rate thresholds shifted upward to mitigate 'bracket creep.'
These updates also incorporate new provisions from the “One, Big, Beautiful Bill,” which further modify credits, deductions, and exclusion limits. For example, the estate tax exemption jumps to $15 million, and the alternative minimum tax exemption is adjusted to $90,100 for individuals. The IRS says these measures aim to preserve tax fairness in the face of inflation while giving taxpayers greater clarity in their planning for the 2026 (filed in 2027) tax season.
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Housing is expensive. Buying a home is out of reach for many Americans because “home prices are historically high relative to incomes”, reported Peyton Whitney of the Joint Center for Housing Studies at Harvard. In 2024, the price of a median single-family home was five times the median household income. (Affordability of homes varies by region.)
Renting isn’t cheap either. The Economist analyzed the affordability of American cities for renters who prefer to live alone. They used “…the rule that a tenant should spend no more than 30 [percent] of their gross income on rent. Using rental prices gathered by…an online property platform, we calculated the salary needed to afford a typical studio apartment in each city.”
Based on median rental prices for August 2025, the publication found the most affordable cities in the United States included:
- Wichita, Kansas
- Baton Rouge, Louisiana
- Lincoln, Nebraska
The report found that some previously unaffordable cities have become affordable, including Knoxville, Tennessee; Denver, Colorado; Madison, Wisconsin; and Norfolk, Virginia.
Then, there are the cities that are affordable only if a renter earns a well-above-average income. The least affordable cities for renters hoping to live alone included:
- New York City, New York
- Miami, Florida
- Jersey City, New Jersey
In addition, “Several of the newly prohibitive cities are in Texas…Last year, both Houston and Dallas were deemed affordable…This year, they fell below that threshold. In Austin, monthly studio rents are now $1,580, a 25 [percent] jump from 2024. This requires a salary of $63,200, more than $10,000 higher than the city’s median wage…Texas has experienced an influx of people in recent years. Many tech firms and other big companies have moved their offices to the state, drawn by low taxes and favorable regulation. Salaries have increased, but rents are rising faster,” reported The Economist.
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AJ Advisors
www.ajadvice.com
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Phone: (615) 709-8709
Fax: (615) 709-8709
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John Stauffer, CFP®
Partner
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Andrew Quinn, CFP®
Partner
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