The Dow Jones Industrial Average (Dow) rose 0.3 percent, the Standard & Poor’s 500 Index (S&P 500) added 1.2 percent, and the Nasdaq Composite Index (Nasdaq) gained 2.1 percent for the week ending Sept. 25. Sector breadth was mildly positive, with six of the S&P sector groups closing higher and five closing lower. The technology sector (3.1 percent) was the strongest performer while the utilities sector (-3.2 percent) was the weakest.

*See below for Index Definitions

Market Observations: 9.21.2026–9.25.2026

The S&P 500 finished the week higher as oil prices retreated and investor sentiment improved following reports that U.S. and Iranian negotiators were exploring a phased path out of the war, which would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade.

Fedspeak—Inflation Worries Remain Front and Center: New York Fed President Williams said the central bank can’t ignore supply shocks if they have a persistent effect on prices, adding the central bank needs to return inflation to target. Williams also said that the labor market is “pretty much” in balance, and is not adding to inflation pressures, and that the impact from tariffs on inflation are in the rearview mirror. Richmond Fed President Barkin warned it could take time for inflationary shocks to wane and there is a risk elevated pressures could become entrenched. Philadelphia Fed President Paulson said additional interest rate hikes may be needed to bring high inflation back to the U.S. central bank’s 2 percent target. Inflation “remains stubbornly elevated,” Paulson said in the text of a speech delivered at an event at her regional Fed bank, adding that “returning inflation to 2 percent is a top priority.” Cleveland Fed President Hammack said the U.S. economy is facing a series of supply shocks, increasing the risk that an inflationary mindset takes hold. Chicago Fed President Goolsbee warned the central bank cannot ignore repeated and persistent supply shocks and must respond in a way that may cause economic hardship.

Economic Roundup: Applications for unemployment benefits dropped last week to the lowest since July, suggesting a broadly stable labor market. Initial claims edged down 1,000 to 197,000 in the week ended Sept. 19, according to Labor Department data, one of the lowest readings since 1969. Building permits during the month of August declined 2.1 percent month over month to an annualized rate of 1.403 million units. The drop was smaller than the initial estimate of a 2.7 percent decline to 1.394 million units. Meanwhile, the U.S. S&P Global Composite Purchasing Managers’ Index rose to 58.4 in September, up from 56.0 in August, and solidly ahead of the 55.3 expected by economists. The reading signaled a stronger expansion in overall private sector activity, as the index moves further above the 50-point threshold that separates growth from contraction. The latest increase suggests that both manufacturing and services continued to gain momentum at the end of the third quarter, with the September figure marking a clear acceleration compared with the previous month.

The Week Ahead: The headline event will be the payroll report for September on Friday. Economists expect nonfarm payrolls to rise by 93,000 in September, down from 162,000 in August, according to Bloomberg. The unemployment rate is expected to hold steady at 4.1 percent. Other labor market indicators due out include the August Job Openings and Labor Turnover Survey on Tuesday and September ADP report on Wednesday. Inflation will be on the radar with the August Personal Consumption and Expenditures report out Wednesday. Other notable indicators include the September ISM manufacturing index on Thursday and the Conference Board’s Consumer Confidence Index due Tuesday. On the earnings front, just six members of the S&P 500 are scheduled to release quarterly results, including Nike and Micron Technology. It will be a busy week of Fedspeak with nearly 20 presentations scheduled throughout the week.

— By Michael Schwager, Chief Market Strategist, Managing Director

Definitions

The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally defined as the leaders in their industry. It has been a widely followed indicator of the stock market since Oct. 1, 1928.

Standard and Poor’s 500 Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The Nasdaq Composite Index is a broad-based capitalization-weighted index of stocks in all three Nasdaq tiers: Global Select, Global Market and Capital Market. The index was developed with a base level of 100 as of Feb. 5, 1971.

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