Market Recap - Week of September 8 through September 12, 2025
- Gordon Achtermann, CFP®, CSRIC®, MBA
- Sep 15
- 3 min read
The S&P 500index rose 1.6% this week in a broad advance led by the technology sector as investors grew more hopeful for interest rate cuts.
The market benchmark ended the week at 6,584.29 and is now up 1.9% for the month and 12% for the year.
Technology stocks led the weekly climb amid better-than-expected quarterly results and increased full-year guidance from Adobe (ADBE) that gave a boost to sentiment around generative artificial intelligence, RBC Capital Markets said in a note to clients.
Investors also increased their bets for the Federal Reserve's policy-setting committee to cut rates at its meeting next week, even after data this week showed US consumer prices rose more than expected in August.
The consumer price index rose by 0.4% in August, up from 0.2% in July and representing the highest since January, the Bureau of Labor Statistics reported. A Bloomberg-polled consensus was at 0.3%. However, core inflation was steady at 0.3% in August, in line with market expectations.
The US Producer Price Index fell by 0.1% in August following a 0.7% increase in July, compared with the 0.3% gain expected in a survey compiled by Bloomberg. After excluding food and energy prices, core PPI declined by 0.1%, compared with the 0.3% gain expected and following a 0.7% gain in the previous month.
Consumer sentiment in the US deteriorated in September to the lowest level since May, according to preliminary results from a University of Michigan survey. Year-ahead inflation expectations held steady at 4.8% this month, while the long-run outlook climbed to a three-month high of 3.9% from 3.5% in August.
Last Week’s Economic Reports
Core CPI (consumer prices) ticked up to 3.1% y/y
Core PPI (producer prices) fell 0.1% m/m
Consumer sentiment fell to 55.4
S&P 500 Sector and Stylebox Returns
Thought of the Week
To cut or not to cut? Markets have been weighing each economic data print on the Fed’s balance of risks. As this week’s chart shows, mixed reports on jobs and inflation have sent the scale tipping back and forth, underscoring the difficulty of the Fed’s position.
After several months of stronger-than-expected payroll gains, July’s jobs report showed definitively that hiring momentum had slowed. Last Friday’s August report told a similar story. The U.S. economy added just 22k jobs last month, well below expectations of 75k, and 27k jobs were removed from the past two months. But this weaker labor market hasn’t translated to material disinflation. Immigration policies are contracting the labor supply, putting upward pressure on wage growth, despite the slowdown in hiring. August’s 4.3% unemployment rate is the highest since the pandemic, but well below the 50-year average of 6.1%. On the other hand, Thursday’s CPI report showed core inflation of 3.1%, well above the Fed’s 2% target, and tariffs and OBBBA stimulus could spark an acceleration.
So, while the last two jobs reports green-light the Fed to cut next week, the margin of error is razor-thin. Stock and bond markets might cheer the decision initially, but the longer-term investing implications aren’t so clear. Rather than boosting demand, rate cuts can destroy it as households lose interest income much faster than the cost of debt comes down. Longer-term yields may actually rise, as a cut next week could fuel concerns about inflation and Fed independence. Tangible assets, such as infrastructure, and diversifying globally can help investors with the challenging task of building a portfolio resilient to both a growth slowdown and an inflation surge.
Source: JP Morgan (edited)
Up Next
Economic data out later this week will include August retail sales, industrial production, housing starts, and building permits. All eyes will be on the Federal Open Market Committee's interest rate decision at the conclusion of its two-day meeting on Wednesday.
Thank you to all who attended this month's market Update webinar!
You can watch the replay on YouTube at https://www.youtube.com/watch?v=ELf7pF8K1fY. The episode is also available wherever you listen to podcasts!
Want more?
You can always find our latest Monthly Market Update webinar and past webinars here:
All the Best,
Gordon Achtermann, CFP®
703-573-7325
Your Best Path Financial Planning
