Weekly Market Performance — September 12, 2025

Markets Blog

David Matzko, LPL Research

LPL Research provides its Weekly Market Performance for the week of September 12, 2025. Stocks extended year-to-date gains with another healthy weekly advance and fresh records across the major large cap averages. This week’s slate of economic data reinforced expectations of a Federal Reserve (Fed) rate cut next Wednesday, while the artificial intelligence (AI) theme received another positive jolt. Global stocks also gained ground with Asian markets supported by tech enthusiasm of their own, while European markets powered through a variety of headlines. Treasury yields pulled back on solidified odds of lower rates, while crude oil gained on the latest ramp in geopolitical tensions.

Index Performance

U.S. and International Equities

U.S. Equities: Amid economic data releases that will likely be key in shaping monetary policy, U.S. equities delivered a solid advance and a record setting week. All three major averages logged fresh record highs as Fed rate cut expectations remained intact following surprise cooling in wholesale inflation and generally in-line core consumer inflation results for August. Wall Street bulls powered stocks higher as the inflation reports firmed expectations of a 0.25% cut at next Wednesday’s Federal Open Market Committee (FOMC) meeting, receiving additional support from a rise in initial jobless claims also released on Thursday. Hopes for lower rates powered record highs across large cap benchmarks, while also sending the Russell 2000 small cap index within 1% of its 2021 record, before the broad equity rally stalled Friday as markets awaited fresh catalysts.

AI stocks also boosted markets this week after software maker Oracle (ORCL) delivered a blowout revenue growth forecast for its cloud infrastructure unit and announced a $300 billion computing deal with OpenAI. ORCL shares jumped well over 20% this week, while the announcements reinforced the AI secular growth theme and rippled across AI-related names to further bolster the positive sentiment.

International Equities: European stocks printed a weekly advance amid an array of headlines across the region. France’s CAC 40 Index and the broader STOXX 600 traded higher early in the week as the French snap election dominated focus after resulting in the ousting of Francois Bayrou as prime minister, quickly replaced by Sebastien Lecornu — marking the fourth French government since June 2024. Attention then turned to the European Central Bank (ECB) holding rates steady at Thursday’s monetary policy meeting, with ECB President Lagarde hinting that the easing cycle may be over. Meanwhile, defense stocks received a lift this week in response to Poland shooting down Russian drones which crossed over Polish territory during the latest airstrike on Ukraine. In corporate news, shares of Novo Nordisk traded slightly lower on the week after announcing roughly 9,000 layoffs and slashing profit growth expectations.

Across the Pacific, Asian equities traded higher on the back of the latest surge in tech enthusiasm. With Friday’s mostly higher close, the Asia-Pacific region logged seven consecutive gains which saw benchmarks in Japan, Taiwan, and South Korea log all-time highs — with the two latter markets leading weekly gains. South Korea was propelled by AI enthusiasm as well as the late week announcement that President Lee will rescind capital gains tax changes. Taiwan was supported by index heavyweight Taiwan Semiconductor (TSM), while mainland China’s weekly gains were fueled by a 2% jump on Thursday on homegrown tech excitement. Hong Kong also posted strong gains, as did Japan, lifted by tech strength and hopes of rejuvenated economic plans after Prime Minister Shigeru Ishiba resigned.

Fixed Income, Currency, and Commodity Markets

Fixed Income: Core bonds, measured by the Bloomberg Aggregate Index, traded higher on the week, as yields dropped as Fed rate cuts grew more imminent. In addition to key inflation data, the week also presented important Treasury auctions to measure ongoing demand, including the sale of three-year, 10-year, and 30-year securities. Despite concerns over lingering inflation, this week’s auctions experienced some of the best end-user statistics ever recorded. The Treasury Department was able to auction off $58 billion of 3-year bonds and $39 billion of 10-year bonds with yields below market expectations, signaling strong interest. As an important test for duration, investor demand for the 10-year auction was the highest on record, with the auction clearing at a yield of 4.033%, 1.3 basis points below expectations. Indirect bidders' take spiked to 83.1% vs. the past three 10-year auction average of 74.6%, with dealers only needing to take 4.2% of the issue, the lowest on record. The 3-year auction was equally successful, although with Fed rate cuts expected over the next few quarters, these results are less surprising. With the August inflation data out of the way, Thursday’s $22 billion 30-year auction was the next big hurdle for the Treasury market, as the 30-year tenor has been relatively unloved, globally. The auction was met with slightly weaker demand relative to auctions earlier in the week, although results remained solid.

Commodities and Currencies: The broader commodities complex traded higher this week with the help of Friday's gains after relatively rangebound trading for most of the week. West Texas Intermediate (WTI) crude supported the complex as geopolitical risks returned to headlines, lifting crude prices on Friday in response to a Ukrainian drone strike on Russia’s largest oil terminal, Primorsk. The strike reportedly suspended operations at the oil hub while fresh sanctions on Russian oil from the U.K. sparked supply concerns — however, the overhang of oversupply from OPEC+ production increases lingers. Elsewhere, gold continued to set new records (now trading at over $3,600/ounce) as Fed rate cuts are all but cemented, a tailwind for the yellow metal as the non-yielding bullion historically benefits in lower interest environments. Platinum, silver, and copper also gained this week, while the U.S. dollar ended little changed as markets digested the potential for rate cut-fueled weakness. The euro traded flat, and the yen was slightly weaker against the dollar.

Economic Weekly Roundup

One Hot Take on Inflation. Headline inflation rose 0.4% from a month ago, the fastest clip since January. Excluding housing, the areas with rising prices are airfares, vehicles, and apparel. A higher cost to international trade was the likely culprit for rising prices on cars and clothes.

Groceries rose 0.6% from a month ago, the biggest rise since August 2022. Trade uncertainty impacts the economy similar to the supply chain challenges of 2022. We should expect this important category to weigh on consumers. In a separate report Thursday morning, the four-week moving average of initial jobless claims rose to 240.5k from 231k the previous week. Despite the slowdown in hirings, actual layoffs are historically low for where we are in the business cycle.

In this week’s numbers, we are seeing some impact from tariffs, especially with higher prices on cars and clothes. A sticky category not as connected to trade is insurance, which we expect to weigh on inflation for the next few months. The hot inflation print will not likely change the Fed’s plan to cut rates in September.

Productivity is Stronger Than We Realize. Headlines focused on Tuesday's preliminary benchmarking for the payroll numbers that will be finalized early next year. Revisions help identify the trajectory of the economy, but one overlooked point is this: the economy grew last year with fewer people working. That means productivity measures were stronger than we thought.

Average annual revisions over the past decade were +/- 0.2% of total employment. For this current round, the revisions indicated an adjustment of -0.6%. Benchmarking is based on the Quarterly Census of Employment and Wages (QCEW), a more comprehensive survey than the smaller monthly payroll establishment survey. However, the household survey which produces the unemployment rate and participation rates are not revised.

The labor market appears weaker than originally reported. But the flip side is productivity (growth per worker) is stronger than we thought. A deteriorating labor market will allow the Fed to highlight the need to ease rates. Investors should expect the Fed to officially start the rate-cutting campaign at the next meeting. Solid household wealth is keeping the middle and upper-income consumer afloat but has the economy in an a-typical business cycle.

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: Empire Manufacturing (Sep)

• Tuesday: Retail Sales (Aug), New York Fed Business Activity (Sep), Import Price Index (Aug), Export Price Index (Aug), Industrial Production (Aug), Manufacturing (SIC) Production (Aug), Capacity Utilization (Aug), Business Inventories (Jul), NAHB Housing Market Index (Sep)

• Wednesday: MBA Mortgage Applications (Sep 12), Housing Starts (Aug), Building Permits (Aug preliminary), FOMC Rate Decision and Median Rate Forecasts

• Thursday: Initial Jobless Claims (Sep 13), Continuing Claims (Sep 6), Philadelphia Fed Business Outlook (Sep), Leading Index (Aug), Net Long-term TIC Flows (Jul), Total Net TIC Flows (Jul)

• Friday: No economic releases scheduled

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.

Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

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.

Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

For Public Use – Tracking: 796683