Weekly Market Commentary September 15th to September 19th 2025
The biggest news of the week comes from the Federal Reserve. Surprising no one, but annoying many (in their perceived lateness), the Fed cut short-term rates this week by 25 basis points. It was the first rate cut since last December, yet it hardly registered in the markets as a cut was all but priced in. The “dot plot”, a graphic representation the individual FOMC members’ anonymous projections for the future fed funds rate, shows a potential for two more cuts by year end.
In economic releases for the week, Tuesday started with surprisingly strong Retail Sales for August. +0.3% was expected but we saw an actual of +0.6%. Last month was revised upwards by +0.1% to 0.6% also. Stronger consumer spending certainly bodes well for third quarter GDP, despite labor tightening and stubborn inflation.
Wednesday was dominated by the Fed, but we also received some disappointing housing data. Housing Starts for August dropped 8.5% but this follows a +5.2% for July proving once again that housing data can be volatile. Building Permits were also down for the month when gains were expected. August came in at -3.7%, which followed -2.2% for July.
Lastly, in the labor markets, Weekly Initial Jobless Claims came in at 231,000 when 242,000 was expected. This followed last week’s rather surprising 264,000 so it certainly has piqued the interest of economists keying in on the tightening labor situation. Claims have been in the low-200’s for seemingly forever but have started to creep up recently. This is a great front-line statistic for charting the direction of the economy.
Equity markets recorded yet another strong week, with major indices closing at record highs. The S&P 500 finished the week at 6,664, a 1.2% increase. The Dow Jones Industrial Average closed up 1.0% at 46,315 and the Nasdaq gained 2.2%, closing at 22,631. In fixed income markets, longer yields across the curve were up with the 10-Year U.S. Treasury Note jumping to 4.25%.
Next week’s important economic releases include S&P Manufacturing and Services Indices, New and Existing Home Sales, Durable Goods, and Personal Income and Consumption. Multiple Fed governors will be speaking and hopefully providing insight into the rate cut decision along with guidance for future cuts.
