Market Data as of Week Ending: 9/26/2025 unless noted otherwise
Most equity indexes finished the week lower as investors continued to debate the outlook for monetary policy. Small-caps underperformed large-caps as rising interest rates weighed on recent momentum. Value stocks outperformed growth stocks for the week, but remain behind year-to-date. Sector performance within the S&P 500 was mixed, with 5 of 11 sectors trading higher. Energy led gains after President Trump emphasized the importance of fossil fuels in a speech that supported higher oil prices. The communication services sector was the weakest, dragged lower by declines in Alphabet and Meta. Foreign equities also retreated, with MSCI EAFE falling 0.41% and MSCI EM down 1.12%.
The yield curve shifted higher as hawkish commentary from the Fed tempered enthusiasm for rate cuts. The two-year Treasury yield rose to 3.63% and the tenyear yield climbed to 4.20%, leaving the 2-10yr slope unchanged at 0.57%. Bonds traded consistently lower across sectors, with investment-grade corporate and high-yield bond yields increasing to 4.85% and 7.07%, respectively, alongside modest spread widening.
Economic data was broadly in line with expectations and produced no major surprises. Core PCE, the Fed’s preferred inflation gauge, increased 0.2% in August and 2.9% year over year. While inflation remains above the 2.0% Fed target, the full impact of tariffs has yet to materialize. Personal income rose 0.4% and personal spending advanced 0.6%, above expectations. Second quarter GDP was revised higher from 3.3% to 3.8%, supported by stronger consumer spending and lower investment. The National Association of Realtors reported that existing-home sales edged down 0.2% in August, equivalent to a 4.0M annual rate, while the Census Bureau noted new-home sales rose 20.5% to a 0.8M annual rate. Consumer sentiment continued to weaken, with the University of Michigan index falling to 55.1 in September from 58.2 in August, reflecting declining expectations for future conditions.