Market Update
Claims for unemployment benefits recently rose to an 11-week high and hiring has slowed in private-sector businesses. The economy only added 22,000 jobs in August, which was below the number expected by forecasters. The previous months’ numbers were also revised and revealed the labor market lost 13,000 jobs during June of this year. That is the first negative number reported since December of 2020.
Most sectors lost jobs, with healthcare being the only one to add a significant number of positions. The unemployment rate rose to 4.3% in August, up from July’s 4.2%, which was in line with expectations.
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The next Federal Reserve Meeting will be held on September 17th, where the governors will continue to debate cutting interest rates. On one hand, the labor market is showing some signs of weakness, which might call for an interest rate cut. On the other, inflation is still an issue, and it has been pushed higher by recent tariffs.
The Federal Reserve has kept the federal funds rate unchanged at 4.25 – 4.5% since December 2024. Fed Chair Jerome Powell has made it clear that the Fed held off on cutting rates earlier this year due to worries that tariffs would send prices higher. So far, inflation has held steady above the Fed’s 2% goal. We’ll be watching closely for the August inflation numbers, which are set to be released right before the Fed’s big meeting.
Despite these concerns, the markets all posted positive performance for the month of August. The S&P 500 rose by 1.91%, buoyed by strong performance in the technology and healthcare sectors. This brings its YTD return to 9.84%.
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The Nasdaq Composite Index outperformed the broader market, posting a gain of around 3.2%. This was largely fueled by robust earnings from several major tech companies.
The Dow Jones Industrial Average (DJIA) ended the month with a gain of just over 1.58%, as some industrial and consumer staples companies faced headwinds.
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Sources:
https://www.morningstar.com/indexes/spi/spx/performancehttps://www.morningstar.com/indexes/dji/!dji/performancehttps://www.spglobal.com/spdji/en/commentary/article/us-equities-market-attributes/
https://www.nytimes.com/live/2025/09/05/business/jobs-report-august-economy?smid=nytcore-ios-share&referringSource=articleShare