Closing Recap (Week Ending September 26) 

U.S. stocks saw a strong Friday rebound, snapping a three-day losing streak, but it wasn’t enough to prevent major indices from ending the week in negative territory for the first time in a month. In currency markets, the US Dollar saw a volatile week driven by Fed expectations and geopolitical risk, with EUR/USD recovering on Friday, GBP/USD tumbling to a 7-week low, and USD/JPY surging on reduced Fed easing bets. Elsewhere, oil and gold posted strong weekly gains, while Bitcoin dropped over 12% from its recent high. 

Key Takeaways 

• Stocks Snap 3-Week Win Streak: A strong Friday rally, fueled by an in-line PCE inflation report, wasn’t enough to save the week. The S&P 500 (-0.3%) and Nasdaq (-0.7%) both posted weekly losses. 
• Currency Pairs React to Shifting Fed Bets: The US Dollar saw a volatile week; EUR/USD recovered to 1.1697 on Friday as Fed cut bets firmed, GBP/USD tumbled to a 7-week low near 1.3320 on broad dollar strength earlier in the week, and USD/JPY surged toward 150.00 as aggressive Fed easing bets unwound. 
• New Tariff Announcements: President Trump announced new tariffs effective October 1st on heavy trucks (25%), furniture (30%), and pharmaceuticals (100%), and is weighing new policies to spur domestic semiconductor manufacturing. 
• PCE Data Keeps Fed Cuts in Play: The Fed’s preferred inflation gauge, Core PCE, met expectations at 2.9% Y/Y, keeping expectations for a September rate cut intact. 
• Oil & Gold Gain Strongly: Crude oil (WTI +5%) posted its best weekly gain in three months, and gold (+3%) marked its 6th straight weekly advance on geopolitical tensions and inflation fears. 
• Bitcoin Pulls Back Sharply: Bitcoin dropped over 12.75% from its recent record high, with analysts split on whether it’s a routine correction or the start of a new bear cycle. 
• Government Shutdown Looms: Markets face a potential US government shutdown on October 1st if Congress fails to pass a funding bill. 
• Week Ahead Focus – Key Risk Events: The crucial US Jobs Report (Fri) and US ISM PMIs (Wed/Fri) will be the primary drivers, alongside the RBA rate decision (Tue) and Eurozone CPI data (Wed). 

Looking Ahead

After a week where stocks snapped their winning streak amidst new tariff threats and looming political deadlines, the market’s attention now pivots decisively to the health of the US economy. Looking ahead, the market’s focus will pivot to the health of the US economy, with the highlight being the US jobs report for September, due out on Friday. After several months of weaker-than-expected reports and significant downward revisions, another soft print could solidify the case for multiple Fed rate cuts this year. Before the jobs report, the ISM manufacturing and non-manufacturing PMIs (Wednesday and Friday) will provide timely insights into business activity and price pressures. 

Internationally, the Reserve Bank of Australia (RBA) decides on monetary policy on Tuesday, with markets pricing a high probability of the bank remaining on hold. Preliminary CPI data for September from the Eurozone (Wednesday) will also be a key focus for currency traders, as further cooling could increase the chances of a “contingency cut” from the ECB. Finally, the Bank of Japan will release the Summary of Opinions from its latest meeting on Monday, which could provide more clarity on the bank’s hawkish tilt.

Traders will watch the RBA for any dovish tilt in its statement, which could hit the Aussie. The BoJ’s Summary of Opinions could provide more clarity on its hawkish stance, while the Eurozone CPI data has the potential to alter ECB rate cut expectations, making this a critical week for AUD, JPY, and EUR traders.

Market Overview

It was a back-and-forth week for U.S. equities, which ultimately saw a three-week winning streak come to an end. A strong rally on Friday, where all eleven S&P sectors finished in the green, helped to stanch the bleeding from earlier in the week. The positive end to the week was kicked off by the release of the Federal Reserve’s preferred inflation gauge, the Core PCE Price Index, which came in-line with consensus at 2.9% year-over-year. This reading was seen as favorable for markets as it kept expectations for a September interest-rate cut firmly on the table. However, sentiment remains fragile, with new tariff announcements from President Trump targeting heavy trucks, furniture, pharmaceuticals, and potentially semiconductors, adding a fresh layer of uncertainty. 

Index	Last Closing Level	Friday’s Change	Friday’s Change (%)	Weekly Change (%)
DJ Industrials	46247	299.78	0.0065	(Implied Negative)
S&P 500	6643	39.02	0.0059	-0.003
Nasdaq	22484	99.37	0.0044	-0.007
Russell 2000	2434	23.28	0.0097	-0.007

Adding to the complexity, the threat of a partial U.S. government shutdown looms, with a funding deadline of September 30th that Congress looks set to miss. In the digital asset space, Bitcoin has dropped more than 12.75% from its record high above $124,500, sparking a debate between traders on whether this is a healthy bull market correction or the start of a more significant downturn.

Economic Data Calendar (Week of September 29th) 

MON (Sep 30): 

• BoJ Summary of Opinions: Details from the hawkish-leaning September BoJ meeting. 
• China Official PMIs (Sep): Key manufacturing and services data from China. 

TUE (Oct 1): 

• US Government Shutdown Deadline: Current funding expires; a partial shutdown begins if no deal is reached. 
• Reserve Bank of Australia (RBA) Rate Decision: Expected to hold rates at 4.10% (93% probability). 
• Preliminary CPI (Sep – from Italy, France, Germany): Early inflation reads from major Eurozone economies. 

WED (Oct 2): 

• Eurozone Prelim CPI (Sep): Key inflation data for the ECB. 
• US ADP Employment Report (Sep): Precursor to Friday’s NFP report. 
• US ISM Manufacturing PMI (Sep): Key factory activity gauge. 

THU (Oct 3): 

• US Initial Jobless Claims (w/e Sep 28): A timely high-frequency indicator of labor market health heading into Friday’s main event. 

FRI (Oct 4): 

• US Nonfarm Payrolls (NFP) Report (Sep): The most critical report of the week for Fed outlook, especially after several months of weaker-than-expected prints. 
• US ISM Services PMI (Sep): Key US service sector gauge.

Commodities, Currencies, and Treasuries 

December gold rose 1% on Friday to settle at $3,809/oz, posting its sixth consecutive weekly advance with a gain of roughly 3%. The move was supported by elevated geopolitical tensions and inflation fears. Crude oil futures posted their best weekly gains in more than three months, with WTI crude gaining over 5% for the week to settle at $65.72/bbl. In the currency markets, the US Dollar had a volatile week. 

Asset	Last Level	Friday’s Change	Unit / % Change
WTI Crude	66	1.02	USD/bbl
Brent Crude	70.13	0.71	USD/bbl
Gold (Dec Fut.)	3809	37.9	USD/oz
EUR/USD	1.1699	0.0034	Rate
USD/JPY	149.5	-0.29	Rate
10-Year Note Yield	0.04185	0.00013	Yield (%)
Bitcoin	$109,643.00	-5.17% weekly	USD

After strengthening earlier on upbeat data and a cautious Fed, the greenback reversed course. The GBP/USD pair tumbled to a 7-week low near 1.3320 before stabilizing, ending the week with a bearish outlook. The USD/JPY pair surged to nearly 150.00 as Fed easing bets unwound, marking a 1.3% weekly gain. The EUR/USD recovered on Friday as in-line PCE data boosted Fed rate cut bets. U.S. Treasury yields rose for the week, with the 10-year yield up 4.7bps to 4.185%, marking its second consecutive weekly increase.