Weekly Market Insights

Stocks fell last week amid concerns about trade with China, following an unsteady rally to record highs over the first half of the week.

The Standard & Poor’s 500 Index fell 2.43 percent, while the Nasdaq Composite Index declined 2.53 percent. The Dow Jones Industrial Average slid 2.73 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, slipped 1.64 percent.^1,2

Stocks Set Highs Before Friday’s Drop

Stocks began the week mostly positive. However, Monday marked Day 6 of the government shutdown, and two of the three major averages powered through any bearish sentiment. The S&P 500 and the Nasdaq each advanced to record closes on fresh enthusiasm for mergers & acquisitions activity after the announcement of two deals. By contrast, the Dow fell slightly.^3,4

Stocks pushed higher midweek as investors looked past the Fed meeting minutes from September, which revealed somewhat divided opinions on interest rates. The S&P and Nasdaq both closed at record highs.⁴

On Friday, sentiment turned negative a little over an hour into the trading session after the White House announced a tariff increase on imported goods from China. The decline, led by chip manufacturers, erased the week’s gains. It was the largest single-day decline for stocks since April.^5,6,7

China In Focus

Meanwhile, focus turned to new export controls that China imposed on so-called rare earth metals—key ingredients for AI-powered microchips and vital resources for the defense industry. Investor concern centered mostly around AI chip companies, which have exposure to China both as customers and in terms of manufacturing.⁸

The White House threatened to cancel its upcoming meeting with the Chinese president over the dispute. China controls approximately 70 percent of the global supply of rare earth metals, meaning a policy change can impact markets.⁸

Separately, the government shutdown entered its second week. Shutdowns typically don’t heavily impact markets, but the uncertainty continues to hang over trading.⁹

Footnotes and Sources

1. ^{WSJ.com, October 10, 2025}
2. ^{Investing.com, October 10, 2025}
3. ^{CNBC.com, October 6, 2025}
4. ^{CNBC.com, October 8, 2025}
5. ^{CNBC.com, October 9, 2025}
6. ^{WSJ.com, October 10, 2025}
7. ^{WSJ.com, October 10, 2025}
8. ^{WSJ.com, October 10, 2025}
9. ^{WSJ.com, October 9, 2025}

Stocks rose last week, looking past the government shutdown and apparently discounting any impact it may have on the economy.

The Standard & Poor’s 500 Index moved up 1.08 percent, while the Nasdaq Composite Index rose 1.32 percent. The Dow Jones Industrial Average advanced 1.10 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained 2.53 percent.^1,2

Shutdown Talk

The S&P and Nasdaq rose out of the gate Monday morning despite the threat of a possible government shutdown hanging over investor sentiment.³

As the midnight deadline approached for Congress to pass a continuing resolution that would temporarily fund the federal government, the prospect of a shutdown dominated market sentiment. The White House discussed permanent layoffs of some federal workers, stoking fears of further slowing an already sluggish labor market.⁴

Stocks initially fell on news of the shutdown but recovered by midday, driven by growing investor expectations that the shutdown would be short-lived. The S&P closed above 6700 for the first time.⁵

Momentum tempered after Treasury Secretary Scott Bessent suggested gross domestic product (GDP) may take a hit due to the shutdown, but all three averages recovered and closed at record highs.⁶

Stocks were mixed on Friday after the Senate failed to pass dueling funding bills that would have prevented the shutdown from entering its second week.⁷

Jobs Report Delayed

Investors have looked past—but continue to be jittery about—the government shutdown and its potential impact on an otherwise resilient economy, which is experiencing a hiring slowdown.

One of the first impacts felt from the shutdown was the Bureau of Labor Statistics’ monthly employment report, scheduled for release on Friday, but delayed until the government reopens for business. However, ADP’s monthly report, released on Wednesday, showed that corporate employers shed 32,000 jobs in September, below the forecast of 45,000 new jobs.⁸

Footnotes and Sources

1. ^{WSJ.com, October 3, 2025}
2. ^{Investing.com, October 3, 2025}
3. ^{CNBC.com, September 29, 2025}
4. ^{CNBC.com, September 30, 2025}
5. ^{WSJ.com, October 1, 2025}
6. ^{CNBC.com, October 2, 2025}
7. ^{CNBC.com, October 3, 2025}
8. ^{WSJ.com, October 1, 2025}

Stocks fell last week, buffeted by concerns about stock price valuations and a possible government shutdown.

The Standard & Poor’s 500 Index declined 0.31 percent, while the Nasdaq Composite Index lost 0.65 percent. The Dow Jones Industrial Average slipped 0.15 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, fell 0.34 percent.^1,2

Stocks Under Pressure

The S&P 500 and the small-cap index Russell 2000 hit all-time intraday highs on Tuesday before trending lower. The decline turned into a three-day retreat for stocks.³

Adding to the selling pressure was Federal Reserve Chair Powell, who made cautious comments on stock price valuations on Tuesday. Investors were also watching a possible government shutdown as Congressional budget deliberations appeared to stall.^4,5

It was the first time in six months that all three averages (Dow, S&P 500, and Nasdaq) declined over three consecutive sessions.⁶

Stocks rebounded Friday after the Personal Consumption & Expenditures (PCE) Index—the Fed’s preferred inflation measure—was in line with expectations. The news appeared to reassure investors that the Fed would move ahead with its “penciled-in” rate adjustments for the remainder of this year.⁷

Economic Snapshot

A flurry of updated economic data hit last week. Here are the key takeaways:

Overall, the indicators suggested a strong economy. The final estimate of Q2 gross domestic product was 3.8 percent, stronger than previous reports. Durable goods orders rebounded in August, driven by a surge in aircraft orders. And weekly jobless claims fell.⁸

The fact that the PCE was in line with estimates—core inflation of 2.9 percent year over year—was welcomed news for investors. The report seemed to support Fed Chair Powell’s position, who on Tuesday suggested that weakness in the labor market outweighed concerns about stubborn inflation.⁹

Footnotes and Sources

1. ^{WSJ.com, September 26, 2025}
2. ^{Investing.com, September 26, 2025}  
3. ^{CNBC.com, September 22, 2025}
4. ^{CNBC.com, September 23, 2025}
5. ^{CNBC.com, September 24, 2025}
6. ^{WSJ.com, September 25, 2025}
7. ^{CNBC.com, September 24, 2025}
8. ^{WSJ.com, September 25, 2025}
9. ^{CNBC.com, September 24, 2025}

Stocks posted solid gains last week, propelled by the Fed’s decision to cut short-term interest rates.

The Standard & Poor’s 500 Index rose 1.22 percent, while the Nasdaq Composite Index climbed 2.21 percent. The Dow Jones Industrial Average advanced 1.05 percent. By contrast, the MSCI EAFE Index, which tracks developed overseas stock markets, fell 0.27 percent.^1,2

 

Third Week of Gains for S&P, Nasdaq

Stocks advanced to start the week following the president’s positive comments on trade talks with China. The news helped push the S&P 500 to close above 6600 for the first time.³

After the Fed announced on Wednesday that it was cutting short-term interest rates by a quarter percentage point, all three major averages fell before rising again in a choppy, mixed trading session.^4,5

After digesting the Fed decision, all three major averages posted solid gains on Thursday, paced by tech names. But small caps stole the day’s headlines, with the Russell 2000 Index gaining more than 2 percent and hitting an intraday record high. Smaller companies tend to disproportionately benefit when the Fed lowers interest rates, given their greater reliance on outside funding than larger companies.⁶

The post-cut momentum continued into Friday; this was the second consecutive week of gains for the Dow Industrials, and the third straight week for the Nasdaq and S&P 500.⁷

 

Following the Fed

The Federal Reserve decision brought the Federal Funds Rate down to a 4-4.25 percent target range—its lowest level in three years.

While widely anticipated, the real news about the cut was in the finer points made by Fed Chair Jerome Powell in the post-meeting press conference. He said the move was essentially a “risk management” cut. This concept confused investors a bit, resulting in scattered markets.

Powell also said two more rate adjustments are “penciled in” for this year. He suggested another rate change could occur in 2026, followed by another in 2027.⁸

 

Footnotes and Sources

 

1. ^{WSJ.com, September 19, 2025}
2. ^{Investing.com, September 19, 2025}  
3. ^{CNBC.com, September 15, 2025}
4. ^{WSJ.com, September 16, 2025}
5. ^{WSJ.com, September 17, 2025}
6. ^{CNBC.com, September 18, 2025}
7. ^{CNBC.com, September 19, 2025}
8. ^{CNBC.com, September 17, 2025}

Stocks posted a solid gain last week, riding a rally in megacap tech stocks while overcoming interest rate anxiety, a downward revision to jobs data, and mixed inflation reports.

The Standard & Poor’s 500 Index rose 1.59 percent, while the Nasdaq Composite Index climbed 2.03 percent. The Dow Jones Industrial Average added 0.95 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained 1.18 percent.^1,2

Stocks At New Highs

Stocks rose to start the week on renewed AI enthusiasm, with the Nasdaq hitting a new record intraday high. Stocks continued to push ahead on Tuesday despite fresh data showing large downward revisions to job creation for the 12 months through March.³

The rally continued midweek after an unexpected drop in wholesale inflation appeared to boost investors’ hopes for Fed rate moves before the year’s end.^4,5

Investors cheered Thursday’s consumer inflation report, anticipating that the reading wouldn’t be enough to derail a Fed rate move this month. The S&P and Nasdaq posted record intraday highs and closes three days in a row, while the Dow Industrials cracked 46,000 for the first time.⁶

The Nasdaq hit a new record close on Friday, while the S&P 500 flattened out and the Dow posted a modest loss on the week’s last day of trading.⁷

Fed Meets After Mixed Inflation Reports

Wednesday’s Producer Price Index (PPI) report showed wholesale prices fell 0.1 percent in August after a 0.7 percent increase in July. Then, on Thursday, fresh Consumer Price Index (CPI) data showed that retail prices rose a hotter-than-expected 0.4 percent in August—faster than July’s 0.3 percent gain.^8,9

All eyes will be on Fed Chair Powell this week. He is expected to outline his plan to adjust rates at the Fed’s scheduled two-day meeting, which ends on Wednesday, September 17. Investors will be looking for insights about how he plans to guide the economy through this period of sluggish job growth and stubborn consumer inflation.

 

Footnotes and Sources

1. ^{WSJ.com, September 12, 2025}
   
2. ^{Investing.com, September 12, 2025}  
3. ^{WSJ.com, September 8, 2025}
4. ^{CNBC.com, September 9, 2025}
5. ^{WSJ.com, September 10, 2025}
6. ^{CNBC.com, September 11, 2025}
7. ^{CNBC.com, September 12, 2025}
8. ^{WSJ.com, September 10, 2025}
9. ^{WSJ.com, September 11, 2025}

Stocks made gains last week, even as megacap tech gains outweighed economic concerns.

The Standard & Poor’s 500 Index advanced 0.33 percent, while the Nasdaq Composite Index rose 1.14 percent. The Dow Jones Industrial Average descended 0.32 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained 0.04 percent.^1,2

Tech Gains, Jobs Slow

Markets started the week on shaky ground. The Dow Industrials, S&P 500, and Nasdaq each slipped downward more than half a percentage point. Tariff uncertainty rose again, as a court ruling injected fresh doubt. Meanwhile, rising Treasury yields amplified volatility and rattled megacap tech names.³

By Tuesday, stocks managed a partial rebound, and market direction shifted. Tech bounced back the next morning—led by two megacap tech stocks’ gains—with one soaring after avoiding an antitrust penalty.⁴

On Thursday, softer private hiring data and rising layoff trends fueled hopes of an imminent Fed rate move, with the S&P hitting a fresh record close. Treasury yields dropped significantly on rate-cut speculation, reinforcing risk appetite. The mood shifted again on Friday. A surprisingly weak jobs report undercut market optimism.^5,6

Focus on Jobs

Friday’s employment report fell short, as employers created fewer jobs last month.

Unemployment increased to 4.3 percent in August from 4.2 percent the prior month, hitting a 4-year high. Job growth slowed to 22,000 jobs in August, after much higher expectations of 75,000. In addition, a revision of the June estimate decreased the number by 27,000 jobs.⁷

Footnotes and Sources

1. ^{WSJ.com, September 5, 2025}
2. ^{Investing.com, September 5, 2025}  
3. ^{CNBC.com, September 2, 2025}
4. ^{CNBC.com, September 3, 2025}
5. ^{CNBC.com, September 4, 2025}
6. ^{WSJ.com, September 5, 2025}
7. ^{MarketWatch.com, September 5, 2025}

Stocks ended the week slightly lower as mixed economic data led to some profit-taking by investors ahead of the holiday weekend.

The Standard & Poor’s 500 Index edged down 0.10 percent, while the Nasdaq Composite Index slipped 0.19 percent. The Dow Jones Industrial Average slid 0.19 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, skidded 1.53 percent.^1,2

Stocks Rise, Then Falter

Stocks initially rose but then took a breather as investors continued to process Fed Chair Powell’s comments from the Fed’s annual symposium.³

Stocks regained momentum midweek as investors waited for the Q2 corporate report from the nation’s most influential artificial intelligence (AI) company. The AI chip maker posted results Wednesday night, with a mixed reception in after-hours trading. On Thursday, the stock rallied, which helped the S&P 500 close above 6500 for the first time.^4,5

On Friday, the Fed’s favorite inflation gauge, the Personal Consumption Expenditures (PCE) Index, aligned with expectations. Still, stocks were under pressure from the opening bell as investors appeared to take profits ahead of the Labor Day weekend.⁵

Mixed Economic News

Revised gross domestic product (GDP) numbers showed the economy grew more quickly in Q2 than initially thought, which was a win for the economic bulls. However, the economic bears pointed out that orders of durable goods declined and the trade deficit was wider than expected. The PCE report, while in line with expectations, was at a 2.9 percent annual rate in July.^6,7,8

Investors are closely watching every piece of economic data for insights about what the Fed will do with interest rates at its two-day meeting, which ends September 17.  So expect attention to focus on speeches by Fed officials until the Fed enters its blackout period before the September meeting.

Footnotes and Sources

1. ^{WSJ.com, August 29, 2025}
2. ^{Investing.com, August 29, 2025}
3. ^{CNBC.com, August 25, 2025}
4. ^{CNBC.com, August 27, 2025}
5. ^{CNBC.com, August 28, 2025}
6. ^{WSJ.com, August 29, 2025}
7. ^{CNBC.com, August 28, 2025}
8. ^{MarketWatch.com, August 29, 2025}

Stocks were mixed last week despite a powerful Friday rally sparked by Federal Reserve Chair Jerome Powell, who opened the door to adjusting short-term interest rates.

The Standard & Poor’s 500 Index picked up 0.27 percent while the Nasdaq Composite Index lost 0.58 percent. The Dow Jones Industrial Average rose 1.53 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 0.80 percent.^1,2

All Eyes on Powell

Stocks traded in a narrow band to start the week as investors awaited fresh economic data and comments from Fed officials at their annual symposium in Jackson Hole, Wyoming.

After a big retailer reported quarterly results on Tuesday and gave encouraging guidance, stocks pushed higher. But markets took a breather later in the day as pressure on megacap tech and chipmakers led the Nasdaq and the broader market lower.³

The S&P 500 and Nasdaq fell after minutes from the Federal Reserve’s July meeting were published; they revealed that most Federal Open Market Committee (FOMC) members were more concerned about inflation than the job market.⁴

On Friday, markets rebounded after Fed Chair Powell opened the door to a rate move at the Fed’s September meeting. The day’s gain was strong enough to regain the week’s lost ground for the S&P and nearly all of it for the Nasdaq—and put the Dow solidly ahead for the week.⁵

Watch the Rotation

Investors appeared to rotate out of megacap tech as some expressed concern about valuations and the durability of the AI-driven rally. Two facts helped support this observation: the S&P fared better than the tech-heavy Nasdaq for the week, and the Russell 2000 Index of small-cap stocks (+3.25 percent) beat all three major stock averages.⁶

The Federal Reserve also rotated a bit. In contrast to the Fed’s July meeting—where inflation was the bigger concern for most Committee members—Fed Chair Powell’s Friday morning speech at Jackson Hole revealed the FOMC was now more concerned with the jobs market.⁷

Footnotes and Sources

1. ^{WSJ.com, August 22, 2025}
2. ^{Investing.com, August 22, 2025}    
3. ^{CNBC.com, August 19, 2025}
4. ^{CNBC.com, August 20, 2025}
5. ^{MarketWatch.com, August 22, 2025}
6. ^{WSJ.com, August 22, 2025}
7. ^{WSJ.com, August 22, 2025}

Stocks rose last week despite mixed signals on inflation as investors kept one eye on the Fed’s September meeting.

The Standard & Poor’s 500 Index advanced 0.94 percent, while the Nasdaq Composite Index added 0.81 percent. The Dow Jones Industrial Average rose 1.74 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 2.16 percent.^1,2

Third Gain in Four Weeks

Stocks posted modest losses to start the week as investors braced for July consumer inflation reports. The White House’s executive order on Monday extending the tariff deadline for China by 90 days failed to move markets in the other direction.³

Stocks then staged a two-day rally following the latest Consumer Price Index (CPI) report, which showed July inflation held steady over the prior month—beating expectations. The inflation news led some investors to move into small-cap stocks, with the Russell 2000 Index of small-cap stocks rising 5 percent over Tuesday and Wednesday.⁴

However, markets slipped Thursday as investors dug into the Producer Price Index (PPI) for July, which showed wholesale inflation hit a 3-year high last month; this was the third weekly gain in the past four weeks for each of the three major averages; the S&P and Nasdaq advanced four of the last five weeks.^5,6,7

A Mixed Inflation Story

Inflation continues to give mixed signals, which can unsettle investors who anticipate the Fed adjusting rates at its September meeting.

Last week’s CPI report showed that “headline” (retail) inflation held steady. Stocks rose in response, even though core inflation—excluding volatile food and energy prices—was hotter than economists expected.

Two days later, the PPI report revealed that inflation began to creep into wholesale prices in July. Stocks fell in response as investors processed the conflicting reports.^8,9

Footnotes and Sources

1. ^{WSJ.com, August 8, 2025}
2. ^{Investing.com, August 8, 2025}  
3. ^{MarketWatch.com, August 4, 2025}
4. ^{CNBC.com, August 5, 2025}
5. ^{CNBC.com, August 6, 2025}
6. ^{WSJ.com, August 7, 2025}
7. ^{WSJ.com, August 8, 2025}
8. ^{WSJ.com, August 5, 2025}
9. ^{Advantage.FactSet.com, August 1, 2025}

Stocks rebounded last week as investor optimism for a September rate adjustment and strong Q2 corporate results overcame the rollout of fresh tariffs.

The Standard & Poor’s 500 Index rose 2.43 percent, while the Nasdaq Composite Index gained 3.87 percent. The Dow Jones Industrial Average added 1.35 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 2.77 percent.^1,2

Stocks Gyrate

Stocks pushed higher to start the week, with major averages gaining between 1.3 percent and 2 percent—their best day since May. Investors seemed more optimistic for a rate move after the weaker-than-expected July jobs report.^3,4

Stocks rose again midweek after the White House confirmed a mega-cap tech company would invest $500 billion more in domestic manufacturing. News of additional tariffs on India was greeted with a muted reaction from investors.⁵

The updated tariffs previously announced by the White House went into effect on Thursday. Markets initially rose in early trading but then came under pressure as the day continued.⁶

But the S&P and Dow rose again on Friday, ending the week with solid gains. The tech-heavy Nasdaq ended the week with a record close.⁷

Economy Watch

Services comprise 70 percent of the economy, so Wall Street closely monitors the Institute for Supply Management’s Services Index.

So, news on Tuesday that growth in services came below economists’ expectations was a bit of a concern. However, investors seemed to quickly look past the number and focus more on the 122 S&P 500 companies that reported earnings last week.^8,9

Footnotes and Sources

1. ^{WSJ.com, August 8, 2025}
2. ^{Investing.com, August 8, 2025}  
3. ^{MarketWatch.com, August 4, 2025}
4. ^{CNBC.com, August 5, 2025}
5. ^{CNBC.com, August 6, 2025}
6. ^{WSJ.com, August 7, 2025}
7. ^{WSJ.com, August 8, 2025}
8. ^{WSJ.com, August 5, 2025}
9. ^{Advantage.FactSet.com, August 1, 2025}