AE Wealth Management: Weekly Market Insights | 8/24/25 – 8/30/25
Weekly Market Commentary
THE WEEK IN REVIEW: Aug. 24-30, 2025
Summer may be unofficially ending — but new record highs are not
Now that Federal Reserve Chair Jerome Powell hinted the Fed would be open to cutting rates, the markets are full of anticipation for a September rate cut.1 That helped drive us to new records for the S&P 500 (6,501.86) and the Dow (45,636.90) last Thursday.2,3 The Nasdaq has suffered from the AI trade losing some steam and is lagging behind its all-time high posted on Aug. 12, but it’s still hanging around within a few hundred points.4
Nvidia’s so-so earnings got a lot of attention last week, which led to a short slump before markets bounced back briefly.5 That faded on Friday as the long holiday weekend approached and traders took the opportunity to sell and lock in profits.
The latest personal consumption expenditures number came in last week and remained slightly elevated at 2.6% year-over-year.6 This triggered some concerns about the certainty of the upcoming rate cut, but Friday’s slump was likely more a result of traders not wanting to go into the Labor Day weekend with big equity exposures.
Let’s get back to the Fed for a minute. Powell signaled he was ready to discuss cutting rates at the September meeting and the markets took off, but what does the trajectory for rate cuts look like? Is Powell throwing the president a bone in the hopes of getting him off his back? After all, gross domestic product (GDP) was 3.3% in the second quarter per the last revision, while inflation is stuck just above 2.5%.7
True, we had a weak jobs number and downward revisions last month, and that was what seemed to get Powell to shift after he realized tariffs weren’t going to result in an inflationary spiral. Add that assessment to the list of Powell’s missteps: first that inflation in 2021-22 was transitory, not understanding that if you give money to people they will spend it and if more goods aren’t produced because no one is working prices will go up. Then he waited too long to raise rates to check that inflation. And the Fed is holding rates too high for too long because he did not understand (or chose not to) how tariffs impact prices.
Now we have the Lisa Cook firing, a Fed governor accused of three instances of mortgage fraud by the Federal Housing Finance Agency (FHFA) and referred to the Justice Dept. for investigation.8 Depending on your point of view, this is either a political attack or it’s just old-fashioned laws-breaking by someone who should know better. Either way, it will be interesting to see how Powell reacts if Cook’s firing stands. After preaching Fed independence and saying the Fed is above politics, will Powell dig in and not lower rates again as a sign of protest? If he does, that could very well be his final mistake.
New shiny object
As the lazy days of summer slide to an end, it appears the news cycle has gone quiet as well. Missing last week was all the excitement of working toward a peace deal between Ukraine and Russia, as Russia continues to attack Ukraine and President Trump mulls over new sanctions on Russia to motivate them to come back to the negotiating table.9
Then there are the trade talks. South Korea’s president visited Washington, D.C., and touted building more ships, but there was no breakthrough on a trade deal.10 And forget about any news from Gaza besides continued reporting of a possible ceasefire, the food crisis and the return of remaining hostages. Plus, now there’s a lot of pushback about the president’s use of the National Guard and additional federal law enforcement to combat crime in D.C.
We bounce around from one story to the next like so many bumblebees moving from flower to flower because we have the luxury of security and the time to get worked up over one issue or another. But it’s important to remember that the winds of change will not always be calm and blow in the same direction.
There’s an old saying: “The time to fix your roof is not when it’s raining.” From a financial planning perspective, it’s not raining; things are good, the stock market is setting records, bonds and CDs are actually paying measurable interest rates and, despite all the headlines, the world is mostly quiet.
That said, market conditions can always change. If you have been coasting and your allocation is out of whack, now is the time to make the appropriate adjustments back to your targets. Risk (in the form of stock market volatility) is a funny thing — people don’t mind when it works in their favor, but when it hits hard people are often beside themselves with anguish. Do yourself a favor and check your roof. If it needs work, do it now while the sun is shining.
Coming this week
- The early part of this week will be quiet. Things will start to pick up on Wednesday, when we’ll get MBA mortgage applications and the Job Openings and Labor Turnover Summary (JOLTS) for August.
- Thursday will feature the ADP employment report for private sector jobs, weekly unemployment claims, U.S. productivity and the U.S. trade deficit. We’ll also hear from some Fed officials as they speak in advance of the big employment report on Friday.
- Speaking of the employment report, markets will hold their breath for the August Bureau of Labor Statistics (BLS) employment situation. Last month’s reading came in at a dismal +73,000, and Trump fired the head of the BLS because the numbers were “phony.”11 Needless to say, this number (and any revisions) will be closely watched.
Index Performance Returns % | |||||
| 1 WK | YTD | 1YR | 3YRS | 5YRS | |
| S&P 500 | -0.10% | 9.84% | 14.37% | 17.77% | 13.04% |
| NASDAQ | -0.19% | 11.11% | 21.12% | 22.00% | 12.75% |
| DJIA | -0.19% | 7.05% | 9.58% | 13.07% | 9.88% |
Interest Rates: | |||||
| 8/29/2025 | 8/22/2025 | ||||
| UST 10 YR Government Bond Yield | 4.23% | 4.26% | |||
| Germany 10 YR | 2.72% | 2.72% | |||
| Japan 10 YR | 1.60% | 1.62% | |||
| 30 YR Mortgage | 6.54% | 6.60% | |||
| Oil | $64.68/ppb | $63.77/ppb | |||
| Regular Gas | $3.19/ppg | $3.15/ppg | |||
| All data as of Aug. 29, 2025 | |||||
Sources:
1 Jeff Cox. CNBC. Aug. 22, 2025. “Powell indicates conditions ‘may warrant’ interest rate cuts as Fed proceeds ‘carefully.’” https://www.cnbc.com/2025/08/22/powell-indicates-conditions-may-warrant-interest-rate-cuts-as-fed-proceeds-carefully.html. Accessed Sep. 1, 2025.
2 Yahoo! Finance. “S&P 500 (ˆGSPC).” https://finance.yahoo.com/quote/%5EGSPC/. Accessed Sep. 1, 2025.
3 Yahoo! Finance. “Dow Jones Industrial Average (ˆDJI).” https://finance.yahoo.com/quote/%5EDJI/. Accessed Sep. 1, 2025.
4 Yahoo! Finance. “NASDAQ Composite (ˆIXIC).” https://finance.yahoo.com/quote/%5EIXIC/. Accessed Sep. 1, 2025.
5 NVIDIA. Aug. 27, 2025. “NVIDIA Announces Financial Results for Second Quarter Fiscal 2026.” https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-second-quarter-fiscal-2026. Accessed Sep. 1, 2025.
6 Bureau of Economic Analysis. Aug. 29, 2025. “Personal Consumption Expenditures Price Index.” https://www.bea.gov/data/personal-consumption-expenditures-price-index. Accessed Sep. 1, 2025.
7 Bureau of Economic Analysis. Aug. 28, 2025. “Gross Domestic Product.” https://www.bea.gov/data/gdp/gross-domestic-product. Accessed Sep. 1, 2025.
8 Steve Kopack. NBC News. Aug. 29, 2025. “Lisa Cook begins court fight to keep her job at the Fed.” https://www.nbcnews.com/business/economy/lisa-cook-sues-trump-administration-hearing-what-to-know-rcna227888. Accessed Sep. 1, 2025.
9 Tessa Wong. BBC. Sep. 1, 2025. “Putin says he reached ‘understandings’ with Trump over end of Ukraine war.” https://www.bbc.com/news/articles/c0qljy44553o. Accessed Sep. 1, 2025.
10 Anthony Kuhn. NPR. Aug. 25, 2025. “South Korean President Lee to meet with Trump in Washington on Monday.” https://www.npr.org/2025/08/25/nx-s1-5508133/south-korean-president-lee-to-meet-with-trump-in-washington-on-monday. Accessed Sep. 1, 2025.
11 U.S. Bureau of Labor Statistics. Aug. 1, 2025. “Employment Situation Summary.” https://www.bls.gov/news.release/empsit.nr0.htm. Accessed Sep. 1, 2025.
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