Weekly Market Commentary August 11th to August 15th 2025
The week started with the highly anticipated Consumer Price Index (CPI), which showed that inflation remains sticky but manageable. The headline number came in a little softer than what economists were expecting at 2.7% while Core CPI was the opposite, posting a 3.1% print. Economists stated that tariffs were reflected in the numbers but inflation in many tariff-sensitive areas of the market were muted. Two of the biggest gainers for the month were medical care services and devices, both increasing 0.8%. The Bureau of Labor Statistics (BLS), that collects this information have been hampered by budget and staffing cuts which has halted data collection in multiple cities. Reports indicate that 20% of the normal sample size was not collected in the month raising questions about the accuracy of the report.
Producer Price Index (PPI) increased the most in three years in July, posting a 0.9% MoM rise. A 1.1% jump in the cost of services accounted for more than three quarters of the broad-based increase in PPI. Goods prices also increased substantially posting a gain of 0.7% as food prices surged 1.4%. Despite the uptick in inflation, the Fed pivot is gaining traction as traders now have nearly a 93% chance of a rate cut in September.
Retail Sales increased 0.5% from the prior month, marking the second straight month of increases while June’s number saw an upward revision to 0.9%, more than the 0.6% that was initially reported. Sales increased in home furnishings while they surprisingly dropped at food and drinking establishments despite being a major vacation month.
All three major stock market indices finished higher for the week. The Dow Jones Industrial Average closed at 44,946, up 1.7%, the S&P 500 Index finished at 6,450 up 0.9% while the Nasdaq finished at 21,623, increasing 0.8%. In the fixed income markets, the 10-Year U.S. Treasury yield finished at 4.32%, unchanged for the week.
Next week’s important economic releases include housing data as well as the PMI Manufacturing Indices.
