Major U.S. stock indexes rose to record highs during the week; Small-cap stocks rallied, with the Russell 2000 Index gaining 2.16%. The Nasdaq advanced 2.21% for the week, while the S&P 500 Index and Dow Jones Industrial Average added 1.22% and 1.05%, respectively. As expected, the Fed lowered short-term interest rates. Recent weakness in the labor market appeared to be the driver of the central bank’s decision to lower borrowing costs. The Fed’s Summary of Economic Projections indicated that most policymakers expect to lower the central bank’s policy rate by an additional 50 basis points by the end of the year, representing more easing than their last projections made in June. Expectations for rate cuts in 2026 and 2027 also increased. Trade developments were also in the headlines following a Friday morning call between U.S. President Donald Trump and Chinese President Xi Jinping. In a social media post following the call, Trump announced that they had reached an agreement regarding U.S. ownership of the short-form video platform TikTok and had made progress on several other issues, including further trade negotiations between the countries. Long-term U.S. Treasury yields increased on Fed commentary. The dollar was up 3 days in a row getting back to flat on the week. Gold ended the week on a positive note, up 5 weeks in a row. In Japan, the BoJ) surprised investors by announcing plans to begin selling its holdings of ETFs and JREITS much earlier than markets had anticipated.
Have a great week-end
Charles for the team