General Market Analysis – 26/09/25

US Stocks Fall After Stronger Data – S&P off 0.5%

The major US stock indices all fell in trading yesterday after weekly employment figures and GDP data beat expectations, pushing back on Fed interest rate cut expectations. The Dow fell 0.38% to 45,947, while the S&P and Nasdaq both lost 0.5% to close at 6,604 and 22,384, respectively. The dollar took another step up on the majors, the DXY rising 0.6% to 98.46. US Treasury yields also rallied, the 1-year up 5.1 basis points to 3.655% and the 10-year up 2.3 basis points to 4.170%. Oil prices pushed up again as geopolitical concerns continued to weigh, Brent up 0.43% to $69.61 and WTI up 0.37% to $65.23. Gold rose despite the stronger dollar, up 0.35% to $3,749.44 by the close.

Dollar Rises Again on Data and Could Fly Higher Tonight

The dollar jumped higher against most of the majors yesterday after a raft of US data came in stronger than expected. GDP data, Weekly Unemployment Claims numbers, and Durable Goods figures all exceeded expectations, reducing market pricing for Federal Reserve interest rate cuts moving forward and causing the dollar to break up from key resistance levels against the Euro, Pound, Swiss Franc, and the Yen. The market is still strongly pricing in another 25-basis point cut from the Fed in October; however, estimates dropped from 92% to 85%. These odds could drop further today with the Fed’s favorite inflation indicator due out. The Core PCE Price Index data is due early in the US day, with expectations that the month-on-month number will fall to +0.2%, while the year-on-year number could push up to 2.9%. Anything further north of either of these expectations should see the dollar resume its recent rise and push even higher into the weekend.

Inflation Data in Focus for Markets Today

The market focus will be mainly on the US session today and the key inflation update out of the States. There are, however, some other updates due across the trading day that will keep traders on their toes and could spark moves before New York opens. There will be a strong focus on Japanese markets with the Tokyo Core CPI number due early in the day. Expectations are for a 2.8% print for the year-on-year number, which could put more pressure on the Bank of Japan to raise rates. There is little on the cards in the European session, but the big data is due just after New York opens. Canadian GDP (exp. +0.1% m/m) data is scheduled, which may move the Loonie; however, the main data will be the US Core PCE Index number released at the same time (exp. +0.2% m/m). The Revised University of Michigan Consumer Sentiment and Inflation Expectations numbers are also due later in the day, but expect the inflation number to dominate flows.

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