The week ended September 26, 2025, saw significant developments in global markets, with major stock indexes experiencing fluctuations amid cautious Federal Reserve commentary and shifting interest rate expectations. The S&P 500 and Dow Jones Industrial Average ended lower, while the Nasdaq Composite fared worse, declining 0.65%. The yield on the 10-year Japanese government bond rose to 1.64%, and the yen weakened against the US dollar.
Global Market Trends
Global markets were influenced by hawkish Fed commentary, which dampened investor optimism around the pace of further interest rate cuts. The eurozone economy maintained a modest pace of growth in the third quarter, according to purchasing managers’ surveys. In contrast, the UK’s PMI fell to 51.0 from 53.5 in August, indicating slowing growth.
US Economic Indicators
In the US, inflation held steady in August, with the Personal Consumption Expenditures Index showing a 2.7% year-over-year increase. The housing market showed signs of recovery, with new single-family home sales rising over 20% from July to a seasonally adjusted annual rate of 800,000. Existing home sales were little changed at a SAAR of 4 million in August.
Interest Rates and Monetary Policy
The Federal Reserve’s decision to cut interest rates by 25 basis points was in line with expectations. However, Fed Chair Jerome Powell’s comments suggested uncertainty regarding the broader economic outlook. The average 30-year US fixed-rate mortgage rate fell for the fourth week in a row to 6.26%. Central banks in Sweden and Switzerland made notable decisions, with Sweden’s Riksbank lowering its policy rate to 1.75% and the Swiss National Bank keeping its key interest rate at 0%.
