Market Recap - Friday, September 26, 2025
Stocks Climb to Close the Week as Inflation Data Calms and Tariff Talk Heats Up
Stocks ended the week on a positive note, with the S&P 500 (+0.59%) and Nasdaq (+0.44%) snapping three-day losing streaks. The Dow gained +0.65% and the small-cap Russell 2000 outperformed with a +0.97% jump. While Big Tech had a mixed day, Tesla stood out as a top gainer. Broader strength came from energy, airlines, hotels, industrials, and banks. On the other hand, furniture retailers, China tech, and consumer staples lagged following newly proposed tariffs. Treasury yields edged slightly higher, the U.S. dollar slipped, and gold closed up another 1.1%. Oil capped off its best week since June with a 5.3% weekly gain, while Bitcoin dipped for the fifth day in a row.
Today’s economic data helped push back against fears of stagflation. Core PCE (the Fed’s preferred inflation gauge) came in exactly as expected, and consumer spending was solid. Inflation expectations in the University of Michigan survey were also revised slightly lower. These signs of steady inflation and resilient consumer activity calmed markets, even as traders processed a wave of new trade policies. President Trump’s tariff announcements on heavy-duty trucks, furniture, and pharmaceuticals sparked concern, but a follow-up from the White House indicated a softer stance on some sectors. Meanwhile, AI headlines continued to swirl - Electronic Arts jumped on reports of a $50B take-private deal, while Nvidia and Intel saw scrutiny over AI capex and chip investments. Despite ongoing uncertainty over rate cuts and government shutdown risk, markets found footing on improving economic data and solid corporate performance.
Here’s Our Take:
The end-of-week rally reflects an encouraging rebound after a stretch of volatility driven by tech weakness, AI skepticism, and shifting rate cut expectations. Friday’s in-line inflation report and steady consumer spending provided just enough comfort to support the view that the Fed can remain patient without needing to turn more hawkish. The broader participation in today’s market — especially among banks, energy, and industrial names — suggests investors are still willing to rotate into economically sensitive sectors, even with geopolitical and policy uncertainties in the background.
The week also highlighted how the tariff narrative is back in play, especially with new policy proposals targeting drugs, trucks, and imported goods. While markets seem relatively unfazed for now, this could add a new layer of volatility if implementation becomes more aggressive. Meanwhile, enthusiasm for AI remains a major tailwind, though questions around ROI and capital deployment are starting to get louder. Overall, we view this week’s action as constructive: markets are absorbing mixed signals well, and the lack of panic selling in response to rate, trade, or AI concerns is a testament to underlying investor confidence — especially with earnings season just around the corner.
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