S&P 500 Holds At Record Amid Calls For A Breather: Markets Wrap

Wall Street traders left stocks hovering near all-time highs amid calls for a break after a $15 trillion rally from April lows, with traders awaiting a handful of Federal Reserve speakers and a key inflation measure.

After notching 27 records this year, the S&P 500 saw a small gain on speculation that its surge has already priced in a range of positive developments such as the restart of the Fed’s rate cuts.

“Of course, there are reasons to be mindful, given the current high valuations compared to long-term averages,” said Mark Haefele at UBS Global Wealth Management. “After such a strong recent run, a period of consolidation should not come as a surprise, in our view.”

In another sign of subdued appetite for risk, the crypto world got hit as traders saw more than $1.5 billion in bullish wagers liquidated on Monday. Gold powered to a record. Silver also rose, with year-to-date gains topping 50%.

Action was relatively muted in the bond market. That’s ahead of a trio of Treasury auctions this week, including $69 billion 2-year notes Tuesday, $70 billion 5-year notes Wednesday and $44 billion 7-year notes Thursday. The dollar edged lower.

At a time when stocks are yet again roaring to all-time highs on the back of big tech companies, investors should be “responsibly bullish,” according to Tony Pasquariello, head of hedge fund coverage at Goldman Sachs Group Inc.

Goldman’s Pasquariello said investors face a situation where positioning looks elevated, while at the same time the tech rally shows no signs of relenting.

“Do I love the positioning setup and tactical risk / reward? I don’t.” he wrote. “With that said, do I think you should be stepping in front of the US mega cap tech freight train? I don’t.”

There was no sign of seasonal weakness in the first three weeks of September, but with the Fed’s rate cut in the rearview mirror, the market will be searching for fresh sources of momentum, according to Chris Larkin at E*Trade from Morgan Stanley.

“In the short term, if economic data comes in soft, it may need to be in a Goldilocks zone — soft enough for the Fed to continue cutting, but not weak enough to fuel recession concerns — for the market to avoid excessive volatility bumps,” he said.

Investor focus is likely to shift to the Fed’s tolerance of sticky inflation in 2026, and away from worries about a weaker labor market, according to Morgan Stanley strategists.

“Should the administration’s intention to ‘run it hot’ play out next year while the Fed cuts rates, revenue and earnings growth could come in much stronger than expected,” the team led by Michael Wilson wrote.

The Fed’s preferred gauge of underlying inflation likely grew at a slower pace last month, offering policymakers some breathing room to address weakness in the US labor market.

A report on Friday is forecast to show the personal consumption expenditures price index excluding food and energy rose 0.2% in August, compared with 0.3% in July. On an annual basis, the so-called core measure is seen holding at a still-elevated 2.9%.

Several Fed officials are set to speak at public events in the coming week, including Chair Jerome Powell on Tuesday. New Fed Governor Stephen Miran — on a temporary leave from his role as chair of the White House Council of Economic Advisers — as well as Michelle Bowman, Mary Daly and Alberto Musalem are scheduled to offer their thoughts on the economy.

“Fedspeak this week will highlight the wide dispersion of views on the Committee,” said Oscar Munoz at TD Securities. “We do not expect Powell to change his tone from his FOMC press conference.”

Munoz also said August PCE is likely to show gradual tariff passthrough into goods prices and moderating services inflation.

Despite the importance of PCE playing into the calculation of the Fed’s next rate decision, Rick Gardner at RGA Investments says that in the near-term, labor-market data carries more weight for the Fed than the inflation data.

“The focus for the remainder of 2025 will be more about what will drive markets in 2026, which includes earnings, the prospects of additional rate cuts in 2026, and the eventual uncertainty over the midterm elections,” he said.

Gardner also noted that the stock market’s strength is making it tougher to put new money to work, as valuations are rising, which makes it all the more important for investors to be selective and bottoms up.

• Oracle Corp. would recreate and provide security for a new US version of TikTok’s algorithm under a deal taking shape to sell the popular Chinese-owned app to a consortium of American investors, a White House official said, addressing a key concern raised by lawmakers in Washington.

  • Oracle on Monday promoted two executives, Clay Magouyrk and Mike Sicilia, to the joint role of chief executive officer. Safra Catz, who has led the company since 2014, will become the executive vice chair of the board.

• ASML Holding NV’s recent rally got a fresh boost on Monday as Morgan Stanley joined the ranks of the stock’s bulls, signaling that the chip-equipment maker may at last show a major uplift from artificial intelligence demand.

• Kenvue Inc. slipped as Trump administration officials plan to link the active ingredient in Tylenol to autism on Monday, the Washington Post reported, citing unnamed people familiar with the matter.

• Pfizer Inc. will pay $4.9 billion for the obesity startup Metsera Inc. in a bid to catch up to rival drugmakers after failing to compete with its own weight-loss medications.

• T-Mobile US Inc. will elevate its chief operating officer, Srini Gopalan, to the chief executive officer spot on Nov. 1, replacing Mike Sievert, who has held the job for nearly six years.

• MetLife Inc. expects third-period income from its private equity and real estate investments to meet its quarterly target for the first time this year, according to a filing Monday.

• Compass Inc. agreed to buy Anywhere Real Estate Inc. in a deal that would create a combined company with a roughly $10 billion enterprise value, cementing Compass’s status as the largest residential brokerage in the US.

• ODP Corp., owner of the Office Depot retail chain, is being acquired by private equity firm Atlas Holdings for about $1 billion.

• Newly-formed Strive Inc. agreed to acquire Semler Scientific Inc. in a deal that combines two publicly-traded Bitcoin treasury companies.

• Porsche AG shares fell the most on record after the luxury-car maker scaled back its electric-vehicle plans, correcting an expensive strategy that’s depressed its margins and is dragging down parent Volkswagen AG.

• Roche Holding AG’s experimental drug giredestrant helped patients with a form of advanced breast cancer live longer without the disease worsening in an advanced trial.

• BBVA SA raised the value of its takeover bid for Banco Sabadell SA by about 10%, a last-ditch effort to get a deal over the line that’s been delayed by regulatory reviews and government opposition for more than a year.

• Samsung Electronics Co. jumped after reports it’s won approval from Nvidia Corp. for the use of advanced memory chips, which marks a breakthrough for the Korean technology leader.

• BYD Co. sank after a report that Warren Buffett’s investment firm offloaded its stake in the Chinese electric-vehicle maker.

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.2% as of 11 a.m. New York time

• The Nasdaq 100 rose 0.2%

• The Dow Jones Industrial Average was little changed

• The Stoxx Europe 600 fell 0.2%

• The MSCI World Index rose 0.1%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro rose 0.2% to $1.1770

• The British pound rose 0.2% to $1.3495

• The Japanese yen was little changed at 147.88 per dollar

Cryptocurrencies

• Bitcoin fell 2% to $113,047.01

• Ether fell 6.3% to $4,194.97

Bonds

• The yield on 10-year Treasuries was little changed at 4.14%

• Germany’s 10-year yield was little changed at 2.74%

• Britain’s 10-year yield declined one basis point to 4.70%

Commodities

• West Texas Intermediate crude fell 0.3% to $62.50 a barrel

• Spot gold rose 1.1% to $3,725.76 an ounce