For the week ending September 26, 2025.

The investment markets had an unusual week, as good news for the economy turned out to be tough news for many stocks. Stronger-than-expected economic growth and spending numbers suggested the economy is holding up well. But that economic growth, combined with inflation, has investors worried that the Federal Reserve will keep interest rates high. That concern sent most stock and bond indices lower, while investors sought safety in commodities like gold and oil.

U.S. Stock Markets

Last week was a tug-of-war between a strong economy and the threat of high interest rates. The major U.S. stock indexes finished slightly down. Growth-oriented stocks, especially in the tech sector, had a particularly tough time. These companies rely on borrowing money to grow, and the prospect of high interest rates for a longer period makes their future profits seem less valuable today. This was made worse by the disappointing debut of social media company "ConnectSphere," whose stock fell sharply after its much-anticipated IPO, souring sentiment for the tech industry. In contrast, value stocks—shares of more established companies that are seen as more stable—held up much better, with large-cap value stocks actually ending the week in positive territory.

Market Sectors

Energy stocks were the standout winners, jumping nearly 5%. This surge was driven by a surprise announcement from OPEC+ that they would be cutting oil production, which sent crude oil prices higher. Utility stocks also had a strong week, gaining almost 3%. Utilities are often considered a "defensive" investment; when consumers get nervous about the future, as recent sentiment surveys suggest they are, investors often move money into these stable, dividend-paying companies. On the flip side, Materials and Consumer Staples companies saw their stocks fall.

Bonds and Currencies

The bond market also felt the pressure from the strong economic data. When the economy runs hot and inflation stays put, it typically leads to higher interest rates, which pushes the price of existing bonds down. As a result, both U.S. Treasury bonds and high-yield corporate bonds ended the week with small losses. Meanwhile, the U.S. Dollar continued to strengthen against other world currencies. A strong economy and the likelihood of high interest rates in the U.S. make the dollar a more attractive currency for international investors to hold.

Commodities and International Markets

Commodities had an excellent week. Gold jumped over 2% as investors bought the precious metal, which is often seen as a safe place to park money during times of uncertainty and as a hedge against inflation. Broader commodities also rallied on the back of surging energy prices. International stock markets didn't fare as well, with indexes tracking Europe and the Pacific region both ending the week down.