Weekly Market Commentary - September 29, 2025

Week In Review

The suprisingly resilient economic data and persistent inflation pressures muddied the outlook for Fed

rate cuts and weighed on market sentiment. The rationale for the recent 25-basis-point “risk management” cut to the federal funds rate was a perception of evolving labor market weakness. The latest reporting of initial weekly jobless claims could alter that stance. Initial claims for unemployment insurance came in at 218,000, a sharp drop from 264,000 just two weeks earlier and the lowest in two months.3 Another marvel was the third and final revision to second quarter GDP, with strong consumer spending supporting a 3.8% annual rate of growth. The boost from 3.3% challenges the notion of an economic slowdown. The core PCE Price Index for the month of August came in as expected, up 2.9% on an annual basis, suggesting a cautious monetary policy path. Fed speeches during the week seemed to confirm the slower approach. Treasury yields jumped on the news and the S&P 500 backtracked -0.3%.

This Week

The economic calendar includes multiple Fed governor speeches that may warrant investor attention,

but the labor report will take center stage. The forecast is for nonfarm payrolls to increase by 45,000, a markedly low pace of job growth, while the unemployment rate remains stable at 4.3%. 4 Market reaction to this report should be interesting, as this level of job growth could fortify a dovish Fed policy but back recessionary concerns.

Portfolio Theme

The Fed cut rates three consecutive times in 2024. Conflicting economic goals kept the Fed in a “wait

and see” approach through much of 2025. Recently, a weakening labor market prompted the Fed to cut rates again. The revised Fed dot plot projects two more rate cuts by the end of 2025. Simplicity offers custom bond portfolios that provide a chance to lock in compelling current yields and lessen the risk of holding too much cash.

_______________________________________

Data: Unless otherwise noted, data for charts, graphs, and tables is sourced from YCharts. Portfolio Themes chart sourced from J.P. Morgan Asset Management.

1Style box returns use various Russell indices tied to specific areas of the market cap (vertical) and style (horizontal) spectrums. Indices are not typically available for direct investment, are unmanaged, and do not incur fees or expenses.

2 Index Statistics: P/E Ratio – Displays the forecasted P/E ratio of the representative index ETF. Yield - Dividend-per-share divided by current share price. Table statistics are updated weekly. MSCI indices represent broad global and international equity markets. Indices are represented by iShares ETF proxies (IVW, IVV, IVE, ACWI, and ACWX).

3 U.S. Department of Labor. 4MarketWatch. Past performance does not guarantee future results.

Weekly commentary and investment advisory services are provided by Simplicity Wealth, LLC a SEC Registered Investment Adviser. Registration does not imply a certain level of skill or training. The information provided is for informational purposes only and does not constitute any form of advice or recommendation. The information contained within has been obtained from various sources and is believed to be accurate at the time of publication.