Weekly Market Performance — September 5, 2025

Markets Blog

David Matzko, LPL Research

LPL Research provides its Weekly Market Performance for the week of September 2, 2025. U.S. equities kicked off September and the unofficial end of summer on a mixed note, with the S&P 500 and Nasdaq edging higher while the Dow slipped below the week-to-date flatline. Monday’s Labor Day holiday didn’t stop a busy week of headlines with markets parsing key jobs data, corporate earnings, and fresh trade deal updates. Overseas, international equities were mixed amid political risks in Europe and the cooling of China’s latest rally. Treasuries overcame a mostly muted week to advance on Friday in response to the latest employment report, which also sent the dollar lower. Commodities advanced despite notable weakness in oil prices.

Index Performance

U.S. and International Equities

U.S. Equities: The major averages edged mostly higher over a busy holiday-shortened week to start the historically weakest month of the year. Risk sentiment was tempered to start September amid upward pressure on Treasury yields and renewed tariff jitters after President Trump’s levies were deemed to be illegally imposed (but remain in effect for now). Nonetheless, Wall Street bulls stepped in to fuel big tech-powered gains mid-week after courts ruled that Google-parent company Alphabet (GOOG/L) will not have to sell its Chrome internet browser. Additionally, a softer-than-forecast JOLTS jobs report Wednesday morning bolstered Federal Reserve (Fed) rate cut bets, and rate stabilization was also welcomed by risk investors. However, after setting a fresh record on Thursday, the S&P 500 and U.S. equities ended the week on a sour note as weak employment data from ADP and the Bureau of Labor Statistics sparked concerns of a more pronounced labor market slowdown. Headlines over the abbreviated week also featured Washington and Tokyo finalizing a trade deal featuring a maximum 15% levy on goods from the archipelago, as well as strong results from chip software maker Broadcom (AVGO).

International Equities: European stocks were mostly lower on the week, although the region rallied back near the unchanged point after political uncertainty in France drove a risk-off session on Tuesday. The French CAC 40 Index delivered measured weekly gains as President Emmanuel Macron and authorities worked to avoid another toppling of the French government. Risk appetite recovered midweek as investors cheered a drop in wholesale inflation and an easing rise in bond yields, before the region pared gains in Friday’s afternoon session. Also from the economic calendar, the final revision to second quarter economic growth for the Eurozone matched prior readings, and consumer inflation remained above target levels, reinforcing speculation that further rate cuts might remain on hold.

Asian equities also ended mixed this week. Despite facing selling pressure early in the week over concerns of stretched valuations and reports of regulators mulling ways to cool equity markets due to the recent fast-paced rally, Hong Kong led gains after erasing a slight week-to-date loss on Friday. Mainland equities also rallied on Friday to provide a floor for weekly losses. Japan printed a solid advance after better-than-feared government bond auctions helped investors shrug off concerns of potential issuance increases to skirt political pressure and assuage calls for stimulus measures. South Korea, Taiwan, and India also delivered weekly gains..

Fixed Income, Currency, and Commodity Markets

Fixed Income: Core bonds, measured by the Bloomberg Aggregate Index, traded higher on the week, jumping on Friday in response to August employment data following relatively subdued trading for the majority of the week. After global sovereign bond yields faced upward pressure to end August and to start September, Treasuries rallied as traders moved to fully price a September Fed rate cut, sending the monetary policy sensitive two-year yield sharply lower. However, despite ongoing concerns about debt and deficit spending, tariff uncertainty, and the potential perceived loss of Fed independence, the U.S bond market remains relatively calm, all things considered. Over the past three months, the U.S. 10-year Treasury yield is lower by roughly 0.33%, whereas 10-year yields for other developed countries are higher by 0.10–0.30%. The story is largely the same for the 30-year tenor as well, with the U.S. 30-year yield lower over the last three months with other 30-year developed government bond yields higher, in this case, by 0.20–0.40%. While the U.S. yield curve has steepened recently (per two-year/10-year curve spreads), we’ve noted repeatedly that the curve was too flat given current economic conditions, and steepening was warranted to get back to a more normal shaped yield curve.

Additionally, despite narrative concerns about U.S. inflation reaccelerating, market-implied inflation expectations, while moderately higher over the past three months, remain below recent highs and are currently unmoored. So, while volatility is expected to continue in the rates market, the U.S. Treasury market remains the preeminent government bond market in the world, in our view.

Commodities and Currencies: The broader commodities complex traded higher this week, measured by a modest gain for the Bloomberg Commodities Index. Another potential output hike from OPEC+ drove West Texas Intermediate (WTI) crude prices lower over the last five days as the cartel aims to regain market share despite softening demand from top fuel consumers and oversupply from non-OPEC+ producers. Meanwhile, gold posted strong gains as the yellow metal approached $3,600/ounce by week’s end in its best weekly gain in three months. Bullion was supported by a Fed rate cut growing imminent, as well as the backdrop of Fed independence jitters, a steepening yield curve, and elevated global political jitters, while silver also gained and copper turned lower. In currencies, the U.S. dollar was mildly weaker against its peers, erasing week-to-date strength in response to weak employment data and bolstered rate cut odds — a headwind for the greenback. The yen strengthened, garnering support from a weaker dollar and the U.S. trade deal, while the euro also gained ground against the dollar.

Economic Weekly Roundup

Coming To a Standstill. Unemployment in August rose to 4.3% from 4.2% the previous month, consistent with what a soft landing looks like. Payrolls grew by 22,000 in August after an upwardly revised gain of 79,000 in July, and June numbers were revised lower by 27,000. With these revisions, employment in June and July combined is 21,000 lower than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) August gains were concentrated in health care and social assistance. Other categories showed little change over the month, including construction, retail trade, transportation and warehousing, information, financial activities, professional and business services, leisure and hospitality, and other services. Average hourly earnings grew 3.7% and continue to outpace inflation, giving some spending power to consumers.

The labor market is coming to a standstill as businesses slow the pace of hiring and await clarity on tariffs and Fed policy. As the Fed prepares for its upcoming meeting, policymakers will likely focus on weakness in the job market to defend their decision to cut rates. The labor data is probably not weak enough for the Fed to cut by 50 basis points (0.5%), so as of now, our expectations are for a 25 basis point cut.

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: New York Fed One-Year Inflation Expectations (Aug), Consumer Credit (Jul)

• Tuesday: NFIB Small Business Optimism (Aug), BLS Preliminary Revisions to Establishment Survey Data

• Wednesday: MBA Mortgage Applications (Sep 5), Headline and Core PPI (Aug), Wholesale Inventories (Jul final), Wholesale Trade Sales (Jul)

• Thursday: Headline and Core CPI (Aug), Real Average Hourly Earnings (Aug), Real Average Weekly Earnings (Aug), Initial Jobless Claims (Sep 6), Continuing Claims (Aug 30), Household Change in Net Worth (2Q), Federal Budget Balance (Aug)

• Friday: University of Michigan Consumer Sentiment Report (Sep preliminary)

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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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.

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