September 19, 2025, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. For the week, the S&P 500 edged up 0.2%, the Nasdaq Composite outperformed with a 0.8% gain, and the Dow Jones slipped 0.4%. The Federal Reserve delivered its first interest rate cut of 2025 on Wednesday, lowering the benchmark rate by a quarter point to a range of 4.00%–4.25%. This marked the Fed’s first move toward easing since last December. Policymakers projected two additional cuts before year-end, with nine officials expecting three total cuts in 2025 and six expecting just one. The Fed’s statement highlighted a cooling labor market, noting that job gains have slowed and the unemployment rate has edged higher, though it remains low. The central bank dropped its prior description of the labor market as “solid,” signaling a shift toward greater concern over employment risks than inflation risks. Markets are now pricing in a gradual move toward a neutral rate near 3% by 2029. Mid-week labor data confirmed some softening in job growth, reinforcing expectations for further easing. Corporate earnings were relatively quiet, but large-cap tech and AI-related companies continued to drive strength, lifting the Nasdaq.
September 12, 2025, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. The S&P 500 climbed 1.6% this week, marking its strongest performance since early August and its fifth gain in the past six weeks. The Nasdaq also advanced, rising 2% for its second straight winning week, while the Dow added 1%, snapping a three-week losing streak. All eyes are now on the Federal Reserve’s September 17 decision on interest rates. Futures markets almost fully expect a quarter-point cut. On the earnings front, S&P 500 companies are on track for 7.5% growth in the second quarter of 2025. If that holds, it would be the index’s ninth straight quarter of earnings growth, with nearly 80% of companies beating analyst expectations. Meanwhile, new data showed wholesale prices slipped 0.1% in August, defying forecasts of a 0.3% increase. Core producer prices, which strip out food and energy, also fell 0.1% against expectations for a 0.3% gain. The surprise drop is a welcome sign for investors, hinting at cooling inflation ahead of Thursday’s closely watched consumer price index report.
September 5, 2025, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. The S&P 500 noted a weekly growth of 0.3%, while the Nasdaq, known for its technology emphasis, jumped by 1.1%. The Dow shed 0.3% on the week. The Bureau of Labor Statistics released disappointing job numbers with the US economy only adding 22,000 jobs for August. This figure is significantly lower than the expected 75,000, providing further evidence of a sharply slowing US labor market. The unemployment rate has risen to 4.3%. Revisions to the data from July and June in the report released on Friday indicate that the US economy has averaged fewer than 30,000 new jobs created over the past three months. Collectively, these statistics constitute the vacancy-to-unemployment ratio (the v/u ratio), which serves as an indicator of the equilibrium between labor supply and demand, and has dropped below 1 for the first time in this cycle. In other terms, there are now more individuals seeking employment than there are companies seeking assistance for the first time since 2021. This has led to Wall Street’s strong conviction that a rate cut is forthcoming at the Federal Reserve’s meeting in September. Traders are currently pricing in a 100% chance of a reduction.