Weekly Commentary (9/29/25) – Markets Slip as Investor Enthusiasm Wanes

Markets continued their upward move last week as investors embraced the potential of the Fed’s rate cutting plan along with positive reactions to China’s sharp policy reversal to stimulate growth.  
           
For the week, the DJIA lost 0.15% while the S&P 500 slipped 0.30%.  The tech-heavy Nasdaq gave back 0.54%.  International markets were also caught in the profit taking. The MSCI EAFE index (developed markets) was lower 0.41% while emerging market equities (MSCI EM) declined 1.12%.   Small company stocks, represented by the Russell 2000, gave back 0.58%. Fixed income, represented by the Bloomberg Aggregate, was dropped 0.28% for the week. As a result, the 10 YR US Treasury closed at a yield of 4.20% (up ~ 6bps from the previous week’s closing yield of ~ 4.14%).  Gold prices closed at $3775.30/oz – up 2.83% on the week. Oil price to close at $65.72 per barrel, up 5.32% on the week.    

Last week saw a number of economic releases and earnings reports. On the economic front – fewer than expected jobless claims along with a solid final reading on 2nd quarter GDP gave investors something to cheer about.  Friday saw the all-important PCE report.  The report confirmed that inflation remains relatively contained, but still well ahead of the Fed’s 2.0% target.   Headline PCE inflation rose 2.7% year-over-year (yoy) – in-line with estimates of 2.7% yoy.  The August monthly growth of PCE came in at 0.2% - in-line with consensus.   
  
The big news for the market this week is the looming government shutdown.  Shutdowns have not proven to be big market moving events, but they have certainly added to uncertainty.  The week ahead has a slew of economic reports: September ISM Manufacturing PMI data, JOLTs Job Openings data, September ADP Nonfarm Employment data, Initial Jobless Claims data, and the much-anticipated September Jobs Report (on Friday).  The jobs report will be particularly important as the data will be closely watched by the Fed and will likely influence the magnitude of their next rate cut.  However, if a government shutdown occurs, the Labor Department will not release any data … thus adding to more drama and uncertainty.  

Wall Street strategists continue to raise year-end price targets.  Investors have been looking through all the noise and markets continue to climb a wall of worry (high valuations, concentrated market, geopolitical tensions, looming government shutdown, etc…).  The good news is that markets have gotten through a normally volatile September relatively unscathed. Sticking close to a long-term asset allocation plan will serve investors well.  

“Success seems to be largely a matter of hanging on after others have let go.”  - William Feather