All Major Indexes Hit New Highs
Markets were very strong this week, with all three major indices hitting new all-time highs. The Nasdaq set a new record again this afternoon. This surge follows a wave of recent economic data pointing toward easing monetary policy from the Federal Reserve at next week’s FOMC meeting.
Labor Market Weakness Reinforces Rate Cut Odds
Labor market data has come in weaker than previously thought. The BLS revised job growth down by 911,000 jobs for the 12 months ending March 2025. While much of this data is from 2024 and considered “old,” when combined with ongoing soft employment trends, it reinforces expectations for a near-certain rate cut in September.
Adding to the signal, initial jobless claims rose to 263,000 this week—well above the 236,000 forecast and the highest level since October 2021.
Inflation Data Continues to Cool
- Producer Price Index (PPI): -0.1% in August (vs. +0.3% expected)
- July PPI revised down to +0.7% (from +0.9%)
- Consumer Price Index (CPI): +0.4% in August (slightly hotter than expected)
- CPI year-over-year: 2.9% (in line with expectations)
Market Outlook
Markets are now pricing in a 100% chance of a Fed rate cut next week, with a high likelihood of additional cuts in October and December. Stocks have continued their strong momentum on these expectations, and we believe markets are positioned to perform well heading into year-end.