September 2025

The S&P 500 gained another +2% in August, continuing its winning streak for the fourth consecutive month, as the economy has presented mixed results, but corporate earnings have exceeded expectations! Q2 GDP was revised higher, after a negative quarter to start the year, while consumer spending continues to accelerate (despite consumer sentiment falling). However, a slowdown in the job market has raised concerns, while unemployment ticked higher. Inflation also remains high due to the tariffs, but luckily the falling housing prices have offset the rising goods costs, keeping the overall inflation rate from getting out of control. We continue to have uncertainty on the tariffs (whether they will stay is now in the hands of the Supreme Court), along with the uncertainty with the Fed reducing interest rates. The expected outcomes will continue to drive inflation higher, so the question for corporations is similar to what we face as small businesses- at what price will consumers stop purchasing? Currently, the labor market has slowed, wage growth isn’t growing as fast as inflation, and consumer sentiment is falling. At the same time, we’re seeing a rise in delinquencies on debt- clearly this is a formula for volatile markets, a trend historically associated with September!  

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