WEEKLY MARKET RECAP – SEPTEMBER 12, 2025

Modest gains on Tuesday followed by a strong rally on Thursday pushed all three major U.S. stock indexes to back-to-back record highs. For the S&P 500, it marked five positive weeks out of the past six, with the index now up nearly 4% since the start of August.

The latest Consumer Price Index showed U.S. inflation rising at a 2.9% annual rate in August, up from 2.7% the month prior. On a monthly basis, prices advanced 0.4%, slightly above forecasts. Core inflation, excluding food and energy, climbed to a 3.1% annual pace.

Bond markets continued to reflect expectations of a Fed rate cut at its September 17 meeting. By Friday’s close, futures markets priced in a 96.4% likelihood of a quarter-point cut and a 3.6% chance of a half-point move, according to CME FedWatch.

Labor market revisions added to concerns over weakening employment trends. The Bureau of Labor Statistics reported Tuesday that the economy created 911,000 fewer jobs from March 2024 to March 2025 than previously estimated. Separately, new weekly jobless claims rose to 263,000—the highest level in nearly four years.

Treasury yields extended their decline, with the 10-year yield falling for a fourth straight week. On Thursday, it briefly dipped below 4.00% for the first time in over five months before closing Friday at 4.06%, down from a mid-July high of 4.49%.

Consumer sentiment also weakened. The University of Michigan’s preliminary September reading fell to 55.4 from 58.2 in late August, its lowest level in four months, reflecting ongoing concerns over slowing job growth.

Gold continued its record-setting rally, climbing for the fourth straight week. Futures briefly touched $3,706 per ounce on Tuesday before settling near $3,681 on Friday. The metal has gained more than 10% in just the past month.

Small-cap stocks underperformed large caps, reversing the prior week’s trend. The Russell 2000 gained 0.3% while a large-cap benchmark advanced 1.5%.