Weekly Market Performance — August 29, 2025

Markets Blog

David Matzko, LPL Research

LPL Research provides its Weekly Market Performance for the week of August 25, 2025. U.S. equities ended the week mixed, with major indexes slightly lower due to Friday’s declines, though the S&P 500 remained on track for a fourth consecutive monthly gain. International markets faced pressure from political uncertainty in France and tariff tensions in India. In fixed income, core bonds posted modest gains, and Treasury auctions revealed steady investor confidence despite concerns over Fed independence. Upward revisions to Q2 GDP raise expectations for Q3, though slowing job growth and softening consumer confidence suggest a potential economic plateau, reinforcing calls for rate cuts.

Index Performance

U.S. and International Equities

U.S. Equities: The major U.S. equity averages ended the week mostly lower thanks to Friday’s losses, but the S&P 500 remained on track for its fourth straight winning month. The Russell 2000 small cap index slightly outperformed its large cap counterparts but was little changed on the week with a couple of hours of trading left ahead of the holiday weekend. Trading volume was light ahead of the holiday weekend.

The big events of the week, NVIDIA’s much-anticipated earnings report and the Fed’s favorite inflation data, generally met expectations. The poster child of artificial intelligence (AI) beat earnings and revenue estimates, but lighter-than-expected data center sales and lack of sales in China resulted in back-to-back declines for the shares after the release. Friday’s inflation report matched expectations, and revealed a slight acceleration in the year-over-year core Personal Consumption Expenditures (PCE) Price Index. The mostly in-line report had minimal impact on market confidence in a September rate cut, although the last trading day of August was a convenient time for some profit-taking.

Earnings put a spotlight on the technology sector, but it was energy that put up strong performance this week amid rising oil and natural gas prices. Financials rode solid gains in the banking group to a nice gain for the week, while defensive sectors including consumer staples, healthcare, and utilities lagged.

International Equities: Political uncertainty and lingering tariff news weighed on international markets this week. The source of much of that political uncertainty, France, suffered a weekly loss of more than 3% as Prime Minister Francois Bayrou has called for a high-stakes confidence vote in parliament to secure his controversial austerity budget. India was another source of weakness in non-U.S. markets, specifically emerging markets, as Prime Minister Narendra Modi tries to navigate a 50% tariff for buying Russian oil. Modi is heading to China for an economic summit where President Xi Jinping and Vladimir Putin will be in attendance.

Fixed Income, Currency, and Commodity Markets

Fixed Income: Core bond sectors, as per the Bloomberg Aggregate Index, were modestly higher on the week, with investment grade corporates and mortgage-backed securities outperforming Treasuries. The U.S. Treasury yield curve steepened during the week, with the monetary policy sensitive two-year yield lower by eight basis points but the 30-year yield higher by more than three basis points. Corporate credit spreads were generally unchanged for the week.

With the ongoing narrative and concerns over the potential loss of the Federal Reserve’s (Fed) independence, this week’s Treasury auctions were seen as a live look at investor demand. The Treasury Department auctioned off over $200 billion (total) of 2-year (both floating and fixed rate), 5-year, and 7-year bonds, which were met with mixed results. The 2-year auctions were very well received as the expectation is generally lower front-end yields due to Fed rate cuts taking place over the next few quarters. But the 7-year auction was more interesting due to its longer maturity, and it was met with below average total demand but elevated demand from indirect bidders. Indirect bidders are generally households, hedge funds, and non-U.S. investors — those investors that would be most concerned about the Fed potentially losing its independence. So, despite the ongoing narrative, end investors still seemingly have confidence in the Fed and its rate setting Committee, for now.

Commodities and Currencies: Relatively broad-based buying pressure lifted the commodity complex 1% last week. Natural gas outperformed after a +10% relief rally developed off oversold levels. West Texas Intermediate (WTI) oil rose 0.5% and held above support from the August lows. Upside momentum in oil has been plagued by building stockpiles and a slowing global economy. Precious metals had a positive week, with both gold and silver climbing over 2%. Gold challenged key resistance around $3,450, and silver broke out from a multi-week range.

The lack of upside in the dollar provided a tailwind for most commodities as the U.S. Dollar Index (DXY) finished near the flatline for the week. While the dollar’s longer-term trend remains higher, the greenback is not far from undercutting this important area of support (96.0).

Economic Weekly Roundup

The upward revisions, especially to intellectual property products, raised the bar for Q3 GDP.

Highlights from the Latest Revisions to GDP (Q2):

• The economy grew 3.3% annualized in Q2, higher than the previous estimate of 3.0% annualized rate.

• The biggest upward revision was to software, a subset of intellectual property business investment. Software spending will not likely contribute to growth in the quarters ahead.

• Consumer spending was also revised up as consumers spent more on nondurable goods.

So, what does this all mean? The upward revisions to second quarter economic growth raise the bar for the third quarter. Slowing job growth indicates the economy will not keep up with the above-trend growth from the previous quarter. Economic growth will likely flatline in the third quarter. Softer growth in Q3 will add fuel to those calling for rate cuts.

Consumer confidence in August dipped ever so slightly as more consumers expect annual inflation to rebound. But the biggest news is the number of consumers saying jobs are hard to get.

Highlights from Conference Board’s Consumer Confidence Report (Aug.):

• Employment prospects have deteriorated. The number of consumers reporting jobs are “hard to get” is the highest since March 2021.

• Consumers’ confidence about the present situation and expectations are both below last year’s levels, which will likely translate into lower consumer spending.

• Inflation expectations rose as consumers are feeling the heat from rising prices. We expect inflation numbers to run hot for the next few months.

• More consumers are reporting slower (as well as declining) income growth. This will also weigh on spending habits.

Bottom Line: Consumers are feeling a softening job market. We should expect upcoming nonfarm payrolls numbers to be on the soft side. LPL Research expects August payrolls to be roughly 60,000 net of revisions.

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: Labor Day holiday; no economic releases scheduled

• Tuesday: S&P Global U.S. Manufacturing PMI (Aug final), ISM Manufacturing Report (Aug), Construction Spending (Jul)

• Wednesday: MBA Mortgage Applications (Aug 29), JOLTS Jobs Report (Jul), Factory Orders (Jul), Durable Goods Orders (Jul final), Capital Goods Orders and Shipments (Jul final), Wards Total Vehicle Sales (Aug), Fed Beige Book Release

• Thursday: Challenger Job Cuts (Aug), ADP Employment Change (Aug), Nonfarm Productivity and Unit Labor Costs (2Q final), Initial Jobless Claims (Aug 30), Continuing Claims (Aug 23), Trade Balance (Jul), S&P Global U.S. Services and Composite PMIs (Aug final), ISM Services Index (Aug)

• Friday: Change in Nonfarm, Private, and Manufacturing Payrolls (Aug), Average Hourly Earnings (Aug), Average Weekly Hours All Employees (Aug), Unemployment Rate (Aug), Labor Force Participation Rate (Aug), Underemployment Rate (Aug)

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Asset Class Disclosures –

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

Bonds are subject to market and interest rate risk if sold prior to maturity.

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High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

Precious metal investing involves greater fluctuation and potential for losses.

The fast price swings of commodities will result in significant volatility in an investor's holdings.

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