Fortis Wealth Management

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September 2025
Market Update
(all values as of 08.29.2025)

Stock Indices:

Dow Jones 45,544
S&P 500 6,460
Nasdaq 21,455

Bond Sector Yields:

2 Yr Treasury 3.59%
10 Yr Treasury 4.23%
10 Yr Municipal 3.20%
High Yield 6.44%

YTD Market Returns:

Dow Jones 7.05%
S&P 500 9.84%
Nasdaq 11.11%
MSCI-EAFE 20.36%
MSCI-Europe 22.28%
MSCI-Pacific 16.87%
MSCI-Emg Mkt 17.01%
 
US Agg Bond 4.98%
US Corp Bond 5.30%
US Gov’t Bond 4.81%

Commodity Prices:

Gold 3,516
Silver 40.76
Oil (WTI) 64.03

Currencies:

Dollar / Euro 1.16
Dollar / Pound 1.35
Yen / Dollar 147.05
Canadian /Dollar 0.72

Macro Overview

Weakening labor data has prompted the Federal Reserve to signal that interest-rate cuts may come sooner than previously expected. Mounting concern over the health of the job market is pushing policymakers toward more proactive easing in an effort to stave off a broader slowdown.

Employment figures have become one of the most closely watched indicators for the direction of the economy, though economists and analysts increasingly question the reliability of government statistics.

Softening labor trends can move markets in opposite directions. Historically, faltering jobs data has pressured the Fed to lower rates, boosting bond prices amid expectations of weaker growth. At the same time, slower hiring can weigh on equities as corporate earnings prospects dim.

Crude oil prices have slid more than 10% since the start of the year, reflecting softer global demand and ample supply. A further decline could filter through to lower gasoline prices, easing inflationary pressures for U.S. consumers.

The Fed has suggested that a cooling labor market may help offset the near-term impact of higher tariffs. Corporate earnings show a mixed picture: some firms are absorbing tariff costs, while others are passing them to customers. Analysts broadly expect an economic backdrop of slower growth, moderating inflation, and additional Fed easing in the months ahead. Lower rates would, in turn, give consumers more room to spend—a key driver of overall activity.

Gross domestic product grew at a 3.3% annual rate in the latest quarter, according to a revised Commerce Department estimate, up from an earlier reading of 3%. Much of the growth reflected a pullback in imports after businesses front-loaded purchases earlier in the year to get ahead of tariff hikes. Trade flows can swing quarterly GDP because of the way growth is calculated.

Meanwhile, Australia’s central bank warned of a global shift in financing away from regulated banks and toward private markets, a development that complicates efforts by authorities to monitor and contain risks in the financial system.

The housing market is closely watching the Fed. Analysts expect a cooling trend to persist as inventories rise and buyers step back, though a cut in mortgage rates could offer some relief. Lumber and shipping costs are falling as tariffs and weaker demand ripple through supply chains. Historically, cheaper lumber has lowered construction costs, while declining container rates reduce the price of imported goods.

(Sources: Commerce Dept, BLS, Labor Dept, Federal Reserve, EIA)

 
47% of the country’s total population makes up the labor market

Rates On Track To Head Lower – Fixed Income Update

Expectations for a cooling job market have shaped bets on interest rates, with the Federal Reserve preparing investors for a possible cut in September. Despite persistent concerns over inflation and growth, bond markets have held steady this year.

The yield spread between two-year and 30-year Treasurys has widened to levels last seen three years ago, a sign of a steepening curve. Longer-term yields rising above shorter-term ones typically point to expectations of sustained growth ahead. Anticipated Fed cuts have pushed down short-term rates, reinforcing the trend.

Mortgage costs are easing in response. The average rate on a 30-year fixed conforming loan has fallen to 6.56%, down from 7.04% in January. Analysts expect other consumer borrowing costs to follow once the Fed moves on additional cuts.

(Sources: Treasury Dept, Labor Dept, Federal Reserve, FreddieMac)

Stocks Awaiting Fed Decision – Domestic Equity Update

Second-quarter earnings sent stocks in different directions in August as companies grappled with tariffs. Some passed higher costs to consumers, while others absorbed them at the expense of profit margins.

The S&P 500’s ten largest firms now make up 39.5% of the index’s value, the highest share on record. Many analysts warn such concentration skews perceptions of overall market performance.

Investors are eyeing a potential Fed rate cut in September, which would ease borrowing costs for heavily indebted firms. Lower rates have historically bolstered earnings and cash flow for smaller companies in particular.

(Sources: S&P, Federal Reserve, Bloomberg)

Employment Market Shows Signs of Strain – Labor Market Overview

The U.S. workforce now totals more than 163 million people, or about 47% of the nation’s population. Monthly shifts in employment levels continue to serve as a key gauge of economic momentum.

One concern weighing on consumers is the sharp slowdown in wage growth since 2022. During the pandemic and its aftermath, employers boosted pay to attract scarce workers, driving salaries higher through 2021 and early 2022. But since then, wage gains have steadily cooled.

Economists warn the decline is straining household finances and curbing spending, dynamics that in the past have preceded recessions. The trend underscores why markets watch labor data so closely for signs of broader economic weakness.

(Sources: Bureau of Labor Statistics)

 
by 2034, the Social Security trust fund will be depleted

Social Security Falls Short On Projections – Retirement Planning

As of April 2025, more than 73 million Americans were collecting Social Security benefits, including 57 million age 65 or older. The program paid out roughly $1.5 trillion in benefits in 2024, according to government estimates.

Social Security remains a financial lifeline for older Americans. Nine in 10 retirees receive payments, which account for an average of 41% of their income. Longer life spans are adding pressure: in 1940, a 65-year-old could expect to live another 14 years; today, the figure is closer to 20.

The program’s finances are already strained. Since 2010, Social Security outlays have exceeded income, forcing reliance on its trust fund, now just under $2.7 trillion. The system operates through two funds—one for retirement, another for disability. Applications for disability benefits have fallen since 2010, and the number of recipients has declined since 2014, offering a modest offset to the broader fiscal challenge.

The latest annual report from the trustees of Social Security and Medicare warns that the Social Security trust fund will be depleted by 2034. At that point, beneficiaries would receive only about 75% of scheduled payments unless Congress steps in to shore up the program’s finances.

Medicare poses an even more pressing challenge. The program’s hospital insurance fund is projected to run dry in 2026. Together, Social Security and Medicare face mounting pressure as America’s population ages. A decade ago, 12% of Americans were 65 or older; today, the share has risen to 16%.

Trustees cited falling birthrates and sluggish wage growth as additional strains on the system, compounding long-term concerns over sustainability. Their projections factor in immigration, health outcomes and broader economic conditions—all of which will shape the trajectory of future benefits.

(Sources: https://www.ssa.gov)

 
there were nearly 1 million fewer jobs than initially reported

Companies Pulling Back On Hiring – Employment Market Review

The credibility of government employment data is under renewed scrutiny after a major revision by the Labor Department. In early September, the Bureau of Labor Statistics reported that job growth from early 2024 through this year was nearly one million lower than initially estimated. The downgrade has amplified doubts about the accuracy of the data and raised concerns over the Federal Reserve’s reliance on it in setting interest-rate policy.

The revision suggests the labor market has been weaker than believed, with far fewer positions created than first reported. Job openings—a measure of corporate hiring appetite—have been falling steadily since March 2022, as firms scaled back from the aggressive hiring seen during the pandemic.

Several economists warn that flaws in data collection and reporting may have misled the Fed’s policy decisions for more than a year, complicating efforts to balance inflation control with economic growth.

(Sources: Dept. of Labor, Federal Reserve)

The Reason Behind Falling Oil Prices – Global Energy Overview

West Texas Intermediate crude, the U.S. oil benchmark, has dropped more than 10% since the start of the year, a slide economists link to weakening global demand. At the same time, production from major suppliers—including Russia, Iran, Iraq, Kuwait, Saudi Arabia and the U.S.—has been climbing, leaving inventories swollen and pressuring prices lower.

Global growth forecasts have softened, with real GDP projections for 2025 trimmed to 3.0% from 3.3%. Slower economic activity is curbing energy use, while currency swings and shipping disruptions add volatility to oil markets. Exporting nations feel the sting of weaker prices, while importers benefit from lower costs.

For businesses and consumers, cheaper oil eases inflationary pressure through falling jet fuel, diesel and gasoline prices. Energy-intensive industries stand to see earnings improve, but drillers and producers face shrinking margins as revenue declines.

(Sources: Department of Energy, Bureau of Labor Statistics)

 

Market Returns: All data is indicative of total return which includes capital gain/loss and reinvested dividends for noted period. Index data sources; MSCI, DJ-UBSCI, WTI, IDC, S&P. The information provided is believed to be reliable, but its accuracy or completeness is not warranted. This material is not intended as an offer or solicitation for the purchase or sale of any stock, bond, mutual fund, or any other financial instrument. The views and strategies discussed herein may not be appropriate and/or suitable for all investors. This material is meant solely for informational purposes, and is not intended to suffice as any type of accounting, legal, tax, or estate planning advice. Any and all forecasts mentioned are for illustrative purposes only and should not be interpreted as investment recommendations.