Markets began Q4 steady despite the US government shutdown on 1 October, which halted key data releases including the September jobs report. Investors largely viewed it as temporary and focused on the Fed’s next steps.
Markets spent most of last week stuck between two narratives: inflation that remains stubbornly high and a Fed that finally made its first cut since late 2024. August’s PCE numbers came in as expected with core prices up 0.3% on the month, 2.7% YoY. Not exactly encouraging, but not worse than feared either. It was just enough to calm nerves after the cut, though investors were left second-guessing whether this was the start of an easing cycle or simply a cautious adjustment.
Markets finally got what they had been waiting months for – the Fed’s first rate cut since late 2024. The move arrived in a week where the data told two stories at once: inflation showed fresh signs of stickiness, but broader momentum looked soft enough to justify easing.
September’s second week was all about balancing softer data with central bank caution and a few geopolitical flare-ups. In the US, the August CPI print came in at +0.4% MoM, pushing the annual rate to 2.9%, its highest level since January. Core CPI held steady at 3.1%, which was enough to reassure investors that underlying pressures aren’t spiralling.
September began with investors weighing softer data, cautious central banks, and persistent geopolitical risks.
In the US, the August jobs report set the tone. Payrolls rose by 165,000, below expectations, while unemployment edged up to 4.3%, the highest since 2023.
