Market Musings 9/2/2025
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
August rallies back from #LaborMarkets shock on #RateCuts hopes…
Markets were a rollercoaster in August starting with a #LaborMarkets collapse, but ends at new highs on #RateCuts optimism. The S&P finished August up +1.9% despite a rocky start. Here’s what happened…
The month opened with a shocking #LaborMarkets report. The July jobs report showed payroll growth slowing to just 73K while unemployment ticked up to 4.2%.
But the real eye opener was the revisions. June’s jobs were cut from 147K to just 14K while May’s 144K to 19K. That’s 258K jobs erased.
Markets sank -1.6% on the very first day of the month. Then, the rebound began.
First, #Tariffs. Semiconductor and in particular #AI chips got a lift after exemptions were announced for certain foreign manufacturers with US operations.
Second, #Inflation. Consumer prices remained in-check with the CPI rising, but not out of control yet. Meanwhile, the producer PPI spiked (though the market largely shrugged it off).
We still expect #Tariffs to flow into consumer #Inflation. Businesses won’t be covering the #Tariffs forever…
And finally, #RateCuts. The weak #LaborMarkets data fueled hopes the Fed might cut rates sooner. Powell’s comments at Jackson Hole reinforced that view with a softer tone highlighting downside risks in #LaborMarkets.
Together, these factors powered a steady rally. By the end of August, the S&P was up nearly 2% and back near all-time highs.
So, what’s next?
September will be all about #RateCuts. We’ll get #LaborMarkets data this week and #Inflation data the next week leading up to the Fed’s #RateCuts decision mid-month. Markets see a 92% chance of a September cut.
We think in-line to even slightly worse data may keep the market optimism intact. However, with stocks at highs, we also think any real negative surprise could flip the market quickly.
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The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursa’s full disclosures here.
Original Photo by fauxels.