Market Commentary

For the week ending 9/12/2025

 

A softening labor market and rising inflation concerns boosted the markets last week as investors remain increasingly convinced that, in light of this troubling economic news, the Federal Reserve will announce a key interest rate cut this week.

All three major indices ended the week ahead as Wall Street posted its best five-day advance in more than a month.

A busy week in terms of economic reports kicked off with the BLS annual revision to nonfarm payrolls, and those numbers were not encouraging. The semi-annual report noted a downward revision of 911,000 for the period between April 2024 and March 2025, significantly more than consensus estimates.

August headline CPI rose 0.4% month-over-month, hotter than expected and more than July’s 0.2% rise.

Weekly initial jobless claims came in at 263,000, its highest level since October of 2021.

Preliminary September US consumer sentiment also came in lower than consensus.

Often, concerning news on the economic front leads to rising numbers on Wall Street as investors hope they’ll lead to lower interest rates. Lower interest rates generally free up corporate money and boost the housing market as borrowing costs become cheaper.

Investor sentiment following this week’s series of reports rose along with expectations that beleaguered Federal Reserve Chairman Jerome Powell would announce a rate cut on Wednesday that would leave the door open for potentially more rate cuts to follow in the coming months. The CME FedWatch tool shows traders are all but convinced that the Fed’s monetary policy committee will deliver a 25-basis-point rate cut at the conclusion of their meeting this week, followed by two more 25-bps cuts in October and December.

For the week, the S&P rose 1.6% to 6,584, the Dow gained 1.0% to 45,834 and the NASDAQ climbed 2.0% to 22,141.

Oil jumped 1.3% to $62.69/bbl, gold rose 0.9% to $3,686/oz and the yield on the 10-year Treasury fell 1 bps to 4.06%.

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