The S&P 500 (Index: SPX) continued its "sideways-to-slightly-up" trajectory in the trading week ending Friday, 12 September 2025, although this week, it moved more slightly up than sideways! The index closed out the week at 6,584.29 after setting three new consecutive record highs on Tuesday through Thursday, dipping just 3.18 points (-0.05%) on Friday. Overall, the index closed out the trading week about 1.6% higher than it had closed out the preceding week.

The biggest market-moving headlines of the week was the release of the Producer Price Index (PPI) on Wednesday, 10 September and the Consumer Price Index (CPI) on Thursday, 11 September. Here, the PPI was down but the CPI ticked up. More importantly, the although the CPI ticked up, it stayed within the range it has run since June 2024. The main drivers of consumer price inflation during the month came from services rather than goods, dispelling the claim of tariffs causing widespread inflation to which several Federal Reserve officials had bitterly clung to justify their not resuming rate cuts in the face of a U.S. economy that has been slowing without them during 2025.

With that poorly supported hypothesis debunked, the inflation data all but cinched the probability the Federal Reserve's Open Market Committee would act to cut the Federal Funds rate by a quarter point at the end of its two-day meeting on Wednesday, 17 September 2025.

The path of the S&P 500 continues to follow the projected trajectory associated with investors focusing on the distant future quarter of 2026-Q2. The latest update of the alternative futures chart shows that outcome.

Speaking of rate cuts, the CME Group's FedWatch Tool projects a 96%+ probability the Fed will cut the Federal Funds Rate by a quarter percent at its 17 September (2025-Q3) meeting on Wednesday, 17 September 2025. Beyond that date, the FedWatch tool forecasts additional quarter point rate cuts will take place on 29 October (2025-Q4) and 10 December (2025-Q4), then pausing for a cycle and resuming on 18 March (2026-Q1).

Here are the market moving headlines of the week that was:

Monday, 8 September 2025

• Signs and portents for the U.S. economy:
• Oil gains after OPEC+ opts for modest output hike
• Cuts to US oil jobs and spending threaten output growth
• Bigger trouble developing in China:
• China's August export growth slowest in 6 months as US tariff risks mount
• Bigger trouble developing in Japan:
• Japan PM Ishiba resigns after bruising election losses
• ECB minions think they may be done with rate cuts for now amid signs of bigger trouble developing in the Eurozone:
• Are we done already? Five questions for markets ahead of ECB
• German exports unexpectedly fall, investor morale plunges
• Crisis-prone France sinks deeper into debt quagmire
• Nasdaq ends at a record, stocks rise ahead of key inflation reports
• S&P 500, Nasdaq recover from losses as markets bet on September rate cut
• Gold extends rally into all-time highs on Fed rate cut expectations

Tuesday, 9 September 2025

• Signs and portents for the U.S. economy:
• US employment growth through March revised sharply lower
• Payrolls faced massive downward revisions due to faulty birth-death model – Pantheon Macroeconomics
• BLS Employment Data Revisions Worse Than 2009, Setting Record
• Oil rises nearly 2% after Israeli attack in Qatar
• Instant view: Oil spikes, gold hit fresh record after Israel attacks in Qatar
• Fed minions fully expected to resume rate cuts after big jobs number miss:
• Fed seen on track for three rate cuts this year, starting next week
• Next prime minister to focus on Japan's inflation:
• Beating inflation is new Japan PM’s top task
• S&P 500 notches record high close, investors bet on Fed rate cut
• U.S. stocks clutch another record high as traders shrug off negative economic news
• Gold rallies to new record on U.S. rate cut hopes, Fed tension

Wednesday, 10 September 2025

• Signs and portents for the U.S. economy:
• Producer Prices Unexpectedly Dropped In August, YoY Inflation Tumbles
• US producer prices slip in August on cheaper services
• US 30-year mortgage rate slides to 11-month low, MBA data shows
• US misses out on billions of dollars of China soybean sales midway through peak season
• Oil prices up after Israeli attacks, but oversupply caps gains
• Fed minions get more data showing tariffs not meaningfully contributing to inflation, ethically challenged Fed minion gets reprieve from friendly judge, new minion headed to confirmation:
• Fed seen on course for rate cuts after PPI data
• US judge temporarily blocks Trump from removing Fed Governor Cook
• Trump administration appeals ruling blocking removal of Fed Governor Cook
• Trump's Fed nominee Miran heads toward swift Senate confirmation
• Less deflation developing in China:
• China's producer deflation eases, helped by crackdown on price wars
• Change in Japan's leadership giving BOJ minions something to think about:
• Japan PM hopeful Motegi endorses BOJ's plan to gradually normalise monetary policy
• Ishiba's departure gives BOJ pause for thought on rate hikes
• U.S. stocks extend winning streak after PPI Index comes unexpectedly lower
• Nasdaq Composite hits 22,000 points: See the Nasdaq 100's best & worst YTD performers
• S&P 500 and Nasdaq notch record-high closes as Oracle soars on AI optimism
• Oracle becomes 10th most valuable company in S&P

Thursday, 11 September 2025

• Signs and portents for the U.S. economy:
• US inflation rises to 2.9% in August
• US Consumer Prices Rise More Than Expected In August From Services Not Tariffs
• Instant view: US consumer prices rise more than expected, but a rate cut still coming
• Oil prices fall nearly 2% on oversupply and weaker US demand
• Fed minions expected to belatedly resume rate cuts after nine month pause after inflation report:
• September Fed rate cut a done deal, at least one more to follow by year-end
• US Fed looks set to resume rate cuts just as its peers are nearly done
• Fed seen on track for rate cuts as job worries eclipse inflation fears
• BOJ minions expected to resume hike Japan's interest rates to fight inflation they unleashed, thinking about unloading ETFs they bought to stimulate Japan's economy:
• BOJ to raise interest rate again in Q4, majority of economists say: Reuters poll
• BOJ signals final phase of Ueda's stimulus unwind - selling ETFs
• ECB minions leave Eurozone interest rates alone:
• ECB holds interest rates steady at 2%
• ECB holds rates again and projects inflation will dip below target next year - as it happened
• Lagarde's statement after ECB policy meeting
• Lagarde comments at ECB press conference
• ECB governors eye December as next chance for any cut, sources
• Dow tops 46k as Wall Street rallies to new record highs
• Wall Street indexes post record-high closes; Tesla and Micron rally
• Dow scales 46K for the first time ever: See how all 30 blue-chip names have done in 2025

Friday, 12 September 2025

• Signs and portents for the U.S. economy:
• Oil jumps after drones strike Russian terminal
• Corporate Earnings Slowdown Signaled By Employment Data
• USDA projects record US corn crop, biggest harvested acres since 1933
• Fed minions having trouble reading Fed's fear meter:
• Fed's fear meter may be pointing to stagnation, rather than stagflation
• Bigger international loans developing in China, China central bank minions focused on Fed, using "stern lectures" to address problems of overcapacity:
• China central bank to better regulate cross-border yuan financing between banks
• China caught in policy dilemma as Fed rate cut looms
• China has a new overcapacity fix: stern lectures
• BOJ minions expected to hold rates steady this month:
• BOJ set to keep rates steady, offer cautious optimism on outlook
• ECB minions, after choosing to do nothing now, thinking about going in different directions:
• ECB policymakers keep rate options open amid uncertain outlook
• ECB’s Nagel says further rate cuts would threaten price stability
• ECB's Villeroy is not ruling out a further rate cut
• Nasdaq sets week-long record closing streak, S&P and Dow stall as Fed decision looms
• Nasdaq notches record high close, traders look to Fed meeting

The Atlanta Fed's GDPNow tool projection of real GDP growth in the U.S. during the current quarter of 2025-Q2 ticked up to +3.1% after predicting +3.0% in the preceding week.

Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull who is excited to open a present from a Federal Reserve official that says 'RATE CUT'". Pretty interesting result from the AI in that the Fed official looks pretty irked at having to give up the rate cut!