Weekly Commentary (9/2/25) – Markets Finished Mostly Lower Last Week to Close-out a Positive August
Markets were mostly lower last week as investors took some profits after markets had hit an all-time high around mid-month. The month of August saw the S&P 500 gain 1.9%.
For the week, the DJIA lost 0.11% while the S&P 500 gave back 0.08%. The tech-heavy Nasdaq declined 0.18% as investors took profits from high-flying tech names. International markets were also in the red with the MSCI EAFE index (developed markets) lower by 1.43%% while emerging market equities (MSCI EM) lost 0.62%%. Small company stocks, represented by the Russell 2000, bucked the trend and inched higher by 0.22%. Fixed income, represented by the Bloomberg Aggregate, gained 0.16%% for the week as yields moved lower. As a result, the 10 YR US Treasury closed at a yield of 4.23% (down ~ 3 bps from the previous week’s closing yield of ~ 4.26%). Gold prices closed at $3473.70/oz – up 2.9% on the week. Oil prices rose slightly to close at $64.01 per barrel, up 0.55% on the week.
Last week saw a number of economic releases and earnings reports. On the economic front - Durable Goods new orders declined 2.8% m/m, but better than the expected decline of 3.8%; 2Q’25 real GDP increased q/q 3.3% versus an expected 3.1%; personal consumption revised to 2.9% on a seasonally adjusted annual rate; and the PCE price index moved higher by 0.2% m/m; U.S. new home sales came in at 652K, better than the expected 630k; U.S. consumer confidence came in at 97.4 against a consensus of 96.5. On the earnings front, the most-watched report came from Nvidia, and they reported better-than-expected numbers. Of course, the big news of the week came on Friday as a federal appeals court struck down President Trump’s reciprocal tariffs. The court allowed the tariffs to stay in place until mid-October to give the administration time to file an appeal (which it will surely do).
The week ahead has a slew of economic reports: August ISM Manufacturing PMI data, July JOLTs Job Openings data, August ADP Nonfarm Employment data, Initial Jobless Claims data, and the much-anticipated August Jobs Report (on Friday). The jobs report will be particularly important as the data will be closely watched by the Fed which meets on September 17 and 18. As of now, odds of a September rate cut by the Fed are 85%-87% (which the market has already discounted). Earnings are expected from a number of companies this week- most notably Broadcom and Salesforce.
Markets have historically been volatile in September so investors should expect a bit of choppiness for the next two months or so. Since 1928, September has generated an average loss of ~0.8% … the worst of any month. Remember, September is just a month – returns have been positive 52% of the time. Sticking close to a long-term asset allocation plan will serve investors well.
We hope that everyone had a wonderful Labor Day weekend.
“Opportunity is missed by most people because it is dressed in overalls and looks like work.” - Thomas A Edison