The Monthly Market Wrap provides an insightful analysis of treasury yields, fixed income performance, mega-cap stocks, and key economic indicators in September 2025. It also delves into housing market data and the performance of commodities.
Key Stock Market Index Performance
Markets moved higher across the board, as the S&P 500 posted its best September month in 15 years, gaining 3.7%. In what has historically been the worst month for stocks, every major index posted gains, led by emerging markets, which increased by 7.2%.
September’s broad-based gains reflect improved investor confidence, as the Fed cut interest rates for the first time this year.
Sector performance was split in September, with technology leading the way, bouncing back from a negative August, advancing over 7.5%. Consumer staples, materials, and energy all went negative, with financials virtually flat at 0.1% in September.
Economic Data
Employment
The unemployment rate ticked up once again to 4.3%, as did the labor force participation rate for the first time in five months, up to 62.3%. As of the latest available August nonfarm payrolls report, just 22,000 jobs were added to the U.S. economy. This falls below the modest Dow Jones estimate of 75,000, marking the fourth consecutive month of missed expectations, as the labor market continues to slow down.
Inflation vs. Fed Funds Rate
The U.S. inflation rate rose to 2.92% in August, as did core inflation to 3.11%. The U.S. Consumer Price Index rose 0.4% MoM, and U.S. Personal Spending ticked up by 0.62%.
At the September 17th FOMC meeting, the Federal Reserve cut its key Fed Funds Rate target range by 25 basis points to 4.00%-4.25%. Fed Chair Powell pointed to a “shift in the balance of risks” and forecasted two more cuts in 2025.
The FedWatch tool now assumes over a 96% chance that the first of these will come when the FOMC meets on October 29th.
Housing Prices and Mortgage Rates
While U.S. New Single-Family Home Sales spiked drastically by 20.48% in August, Existing Home Sales decreased by 0.25% MoM.
The Median Sales Price of Existing Homes fell for the second month in a row by 0.73%, with prices sitting at $422,600.
Mortgage rates declined throughout September; the 15-year Mortgage Rate was 5.49% as of September 25th, while the 30-year closed the month at 6.30%.
Fixed Income
Treasury yields declined across the ends of the curve in September, though the 2-year, 3-year, and 5-year all increased slightly. One of the most significant drops came from the 30-year, down 19 basis points to 4.73%, reflecting market expectations of slower growth and easier policy conditions after the Fed lowered its target range.
Bautis Financial LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.