Still More New All-Time Highs

August 29, 2025

The rally that saw the S&P 500 jump more than 30% in just over 90 days continued in August.  A combination of good quarterly corporate earnings reports, solid economic numbers, and a growing belief that interest rates will be coming down drove all the major indices to new all-time highs.  The rally has been dominated by technology names, but late in the month we began to see a rotation out of that space into more value-oriented names.  This “widening” of the rally is important if we are going to continue moving higher. At the end of the month the S&P 500 had gained 1.9% and is now 9.8% higher for the year. The rate on the 10-year Treasury declined 3%.  Oil was down 7.6% but gold gained 5% and is closing in on the all-time high.

The month began on a Friday with a disappointing jobs report that sent the S&P 500 down nearly 2%, but over the weekend investors realized that weaker jobs could mean lower interest rates and Friday’s losses were erased the following Monday.  During the week we learned that the important service sector of the economy, while still expanding, did slow in July, but that was muted by stronger than expected earnings reports from McDonalds and Apple.  We ended the week with news that the long-awaited tariffs on the semiconductor sector were less onerous than feared. The volatile first six days of trading ended with the S&P 500 up .8%.  The focus during the second week was inflation, which showed the Consumer Price Index in July was up an annualized 2.7%, same as June, and traders decided that report, combined with the weak jobs report, means a very likely interest rate cut at the Federal Reserve September meeting.  Later in the week the Producer Price index, which measures wholesale inflation, was up an annualized 10.8% but was widely viewed as a “one off”.  The week ended with the S&P 500 up another .9%. The following week we saw aggressive rotation out of this year’s high beta stocks into more defensive names.  The S&P 500 was on 5 days losing streak when Powell suggested the time may have come to cut interest rates and the index responded with a rally that pushed it to a gain for the week of .3%. The final week the market was focused on the quarterly earnings report from Nvidia.  This is the most important earnings report each quarter because it is AI that has been driving the market and the economy and Nvidia drives AI.  Wednesday night they reported revenue and net income slightly above what analysts were expecting, and everyone breathed a sigh of relief.

October has a bad reputation, but it is September that has historically been the most difficult month for stocks.  September is the only month with the S&P 500 down more often than up and with an average loss of 1.2% the performance has been 10 times worse than the next underperforming month. The explosive rally from the April low has left stocks richly valued on a historical basis and September would be a logical place to see some profit taking. However, we are likely to see an interest rate cut mid-month which may cause money managers to remain more fully invested and profit taking could be muted by fear of missing out.  Managers appear to be more concerned with missing a big move higher than they are with downside risks. We have been cautious coming into the month and will likely continue that caution through mid-October.  We do not believe a large decline is likely, but a pullback from all-time highs would make sense and we will be buyers of a tradeable decline.

If you know someone who would be interested in learning more about Greenberg Financial Group or taking advantage of our complementary financial plan, please contact us at 520-544-4909, or visit our website at www.greenbergfinancial.com. As always, the key to successful investing is to have a portfolio that is consistent with your investment objectives and risk tolerance. We invite you to listen to our weekly Money Matters radio show which airs every Sunday Morning from 8:00 AM to 10:00 AM on KNST AM 790.  You can also listen to us on iHeart radio, follow us on Twitter@gbergfinancial or on Facebook under Greenberg Financial Group.  Previous radio shows are available by going to www.iheart.com or using the iHeart app and typing Money Matters with Dean Greenberg.