US Weekly Recap: Dow (0.32%), S&P +0.33%, Nasdaq +1.14%, Russell 2000 +1.04%
Friday, September 05, 2025 (GMT)

Overview:

US equities were mostly higher for the holiday-shortened week, starting the new month on a risk-off note and by Friday paring back from Wednesday/Thursday strength (Thursday saw the S&P print another fresh record high). Big tech was mostly higher, with GOOGL +10.4% and AAPL +3.2% up on a better-than-feared antitrust ruling. Other outperformers included homebuilders (rates), communications/networking, retail, food, staples retailers, HPCs, and biotech. Larger firms in most-shorted and China-exposed baskets fared well, as did retail-investor favorites. Laggards included energy (crude), IBs, asset managers, exchanges, apparel chemicals, A&D, and larger-cap banks.

Treasuries firmed notably across the curve as expectations grew for more Fed cuts this year; the 2Y yield hit its lowest point since early April and one of its lowest points in the past three years. The dollar was down on the euro cross but a bit better vs the yen; DXY was flat for the week. Gold was up 3.9%, finishing at a fresh record level and ending higher for the fifth week of the past six. Oil was down after two weeks higher, with WTI settling off 3.3%. The market was focused on new OPEC+ headlines about further output increases from eight cartel members.

What happened?:

The major economic focus this week was the August nonfarm payrolls report, which showed growth of only 22K jobs in the month (and a 21K reduction in the prior two months, resulting in negative job growth for June). The report provided more evidence of a labor-market slowdown, and pushed market expectations for rate cuts toward three 25bp moves before year’s end. Note Fed Governor Waller (on Trump’s short list to be the next Fed chair) has been consistently saying a softening labor market increases the need for the Fed to begin easing, but the prospect of a weaker jobs market was also mentioned this week by regional Fed presidents Musalem, Bostic, and Kashkari.

Elsewhere on the economic front, August ISM manufacturing came in below on the headline, though new orders rose. ISM services was a bit better, with new orders moving back into expansion the highlight. Initial jobless claims printed above consensus, but continuing claims were below. The US trade balance widened in August. The Fed’s latest Beige Book report noted mixed economic conditions. And in an interesting takeaway from this week’s July JOLTS report, job openings contracted more than expected, leaving more unemployed people than job openings for the first time since the pandemic.

Several headlines on trade were in focus this week. Last Friday, the US court of appeals concurred with a lower court opinion finding that the president does not have unlimited tariff power under 1977’s International Emergency Economic Powers Act (IEEPA). Trump warned that this decision, if upheld, “would literally destroy the United States of America” and sought an expedited ruling from the US Supreme Court; however, Friday’s ruling said tariffs could stay in place until 14-Oct to offer time for such an appeal. In other news, late in the week the president issued an executive order finally fleshing out the US-Japan bilateral trade agreement. There was also a report the US is preparing to launch a renegotiation of the US-Mexico-Canada (USMCA) trade deal, as has been expected.

Fed independence remained in focus with headlines the Justice Department has opened a criminal investigation into Fed Governor Cook on allegations of mortgage fraud. But of note, GOP Senator Tillis (who sits on the Senate Banking Committee) said he would not consider any nominee for Cook’s position until her case is decided by the courts. That committee this week also heard from Stephen Miran, who has been nominated to fill Kugler’s spot on the committee; he talked up Fed independence but also said he would retain his job as director of the White House’s Council of Economic Advisers. Finally, Treasury Secretary Bessent said he would soon be conducting a “flurry” of interviews for Fed Chair Powell’s successor.

While this week reinforced the likelihood that the Fed will soon embark on more policy easing, events also resurfaced concerns about risks to the economy. Slowing nonfarm payrolls growth, a shrinking pool of job openings, and increased Challenger job-cut plans continued to illustrate a “no hire/no fire” economy with risks potentially tilted to the downside. Tariffs remain a source of persistent uncertainty to businesses and consumers, with the IEEPA case adding to the lack of clarity going forward (and potentially putting pressure on the Treasury market, which has seen tariff revenue as helping to offset rising issuance). All that said, corporate reports this week highlighted consumer resilience and travel demand, and new-order improvement in both ISM reports was welcomed.

Corporate highlights:

In the major corporate story this week, GOOGL +10.4% saw its US antitrust case resolved but without the most severe penalties sought by the US government. The decision requires the company to share online search data with rivals and bars exclusive contracts for delivering its products, but did not mandate the sale of its Chrome business or call for an end to its $20B/yr revenue-sharing deal with AAPL +3.2%.

Elsewhere among this week’s biggest movers, AEO +45.4% beat on most key metrics and talked upsuccess of recent marketing campaign. M +31.0% reported a big earnings beat featuring their strongest comps in 12 quarters. SNDK +30.7% was helped by positive analyst comments on the NAND market, and announced a ~10% price hike. CIEN +24.2% beat with guidance ahead on a record next-Q order book. GWRE +20.1% earnings and guidance beat with focus on pickup in cloud deals. IOT +16.5% saw sequential ARR acceleration. CRDO +14.4% beat and raised amid higher demand. AVGO +12.6% reported solid results for AI semis and talked up OpenAI order announcement.

To the downside, DLTR (7.4%) comps and EPS were ahead, but there was some concern about tariff headwinds and guidance was raised less than the beat. CXM (9.6%) next-Q guidance came in light and company announced CFO departure. KVUE (10.1%) dropped after RFK Jr. said he would announce a link between acetaminophen during pregnancy and autism. SAIC (10.9%) flagged slower on-business growth and continued delays in new-business awards. PHR (11.2%) beat but guidance underwhelmed; there were also cautious takes on $160M cash deal for AccessOne. LULU (17.0%) lowered guidance amid weakness in US casual, the challenging competitive backdrop, and tariff headwinds on margins. FIG (21.9%) results were seen as mixed and came against elevated expectations.

Coming next week:

Next week’s big economic report will be Thursday’s release of August CPI, with consensus currently looking for core CPI to rise 0.3% m/m, consistent with August’s pace and staying at a 3.1% y/y level. Other releases will include NFIB small-business optimism (Tuesday), August PPI (Wednesday), initial claims (Thursday), and preliminary September UMich consumer sentiment and inflation expectations (Friday). There will also be some attention to data revisions from the Quarterly Census of Employment and Wages (QCEW) on Tuesday 9-Sep.

The Treasury will auction $58B in 3Y notes (Tuesday), $39B in 10Y notes (Wednesday), and $22B in 30Y bonds (Thursday). There will be no Fedspeak due to the blackout period ahead of the September 16-17 FOMC meeting. There will be just a few earnings releases of note, including ORCL and SNPS (Tuesday post-close); KR (Thursday pre-open); and ADBE (Thursday post-close).

S&P 500 Sector Performance:

Outperformers: Communication Svcs. +5.07%, Consumer Disc. +1.59%, Healthcare +0.35%, Consumer Spls. +0.34%

Underperformers: Energy (3.51%), Financials (1.73%), Utilities (1.06%), Industrials (0.86%), Materials (0.37%), Real Estate (0.34%), Tech +0.19%

---

High earner? Learn how a backdoor Roth IRA can help maximize your retirement savings—even if you face income limits.

---

The S&P 500® Index is a capitalization index of 500 stock-designed to measure performance of the broad domestic economy through changes in the aggregate market value of stock representing all major industries. https://us.spindices.com/indices/equity/sp-500 The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities. https://us.spindices.com/indices/equity/dow-jones-industrial-average The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes over 2,500 companies, more than most other stock market indexes. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indexes. https://indexes.nasdaqomx.com/Index/Overview/COMP The MSCI World Index, which is part of The Modern Index Strategy, is a broad global equity benchmark that represents large and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and MSCI World benchmark does not offer exposure to emerging markets. The MSCI Emerging Markets (EM) Index is designed to represent the performance of large- and mid-cap securities in 24 Emerging Markets countries of the Americas, Europe, the Middle East, Africa and Asia. As of December 2017, it had more than 830 constituents and covered approximately 85% of the free float-adjusted market capitalization in each country. https://www.msci.com/ The S&P GSCI Crude Oil index provides investors with a reliable and publicly available benchmark for investment performance in the crude oil market. https://us.spindices.com/indices Companies in the S&P 500 Sector Indices are classified based on the Global Industry Classification Standard (GICS®). https://us.spindices.com/indices