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September 08, 2025

Beacon Weekly Investment Insights 9.8.25

Portfolio Manager, Matthew Kelly, provides insights to guide you through changing market conditions. Please read the full text below or download the PDF version.

The abbreviated trading week produced plenty of thought-provoking headlines for investors to contemplate, particularly as it related to tariffs and the health of the labor market. Toward the beginning of the week, new details emerged regarding the U.S. Court of Appeals for the Federal Circuit’s recent judgement, that found President Trump exceeded his legal authority when he abruptly announced his sweeping reciprocal tariffs several months ago. The court zeroed in on the specific act that was utilized to implement these tariffs, that being the 1977 International Economic Emergency Powers Act (often referred to by its acronym IEEPA). The ruling that was handed down essentially invalidated the tariffs, on the grounds that they are a core Congressional power, which in this instance was not granted. To fully appreciate the significance of this preliminary finding, the broader tariffs were impacting roughly 70% of all imported goods and if struck down, the duties would affect just 16% of the overall population, according to a recently published report by the Tax Foundation. President Trump and his cabinet emphatically countered this, stating they’d like for the Supreme Court to weigh in and the administration formally requested an expedited hearing shortly after this was announced. It is worth noting that this temporarily halts the lower court’s decision until the Supreme Court decides if they’ll take the case. Furthermore, please note certain tariffs were not impacted by this, namely steel and aluminum-based products, since they were imposed under different measures. If the ruling is upheld, this would deal a major blow to the President’s broader trading agenda and with recent estimates pegging year-to-date tariff revenue in the neighborhood of $180 billion, proponents of these trade policies would be forced to accept the fact that these revenues cannot be used to pay down the governments mounting debt, as initially envisioned. It would also beg the question of whether refunds should be issued to the businesses that previously paid these levies, further complicating matters. While on the topic of courtroom events, Google received some welcome relief this week in connection with its antitrust case that was brought about by the Department of Justice (dating back to 2020) and stemmed from a prior determination in August of last year, which effectively declared the company's search business a monopoly. The news delivered was not as bad as feared though and market participants cheered the fact that as part of the remedies package the company does not have to sell or break up its Chrome and Android business units, allowing the company to put these regulatory hurdles in their rearview mirror. However, pursuant to the ruling – Judge Amit Mehra who presided over the case, provided a roadmap for the company to follow moving forward, specifically – the company should not enter into exclusive search contracts and they are now required to share certain search data, in the name of competition. Apple shares rose in unison, as their lucrative partnership with Google was preserved (Google pays Apple around $20 billion per annum to be the default search engine on its devices for reference).

The labor market captured the spotlight in macroeconomic news, with the arrival of the August ADP and non-farm payroll jobs reports. The Job Openings and Labor Turnover Survey or JOLTS survey (as it is more commonly known as) formally preceded both of these and its findings revealed some softening in the labor market, with the number of openings missing expectations (approximately 7.18 million reported versus 7.4 million expected) and perhaps most importantly, it uncovered that the number of unemployed individuals is now greater than the number of available job openings, a condition that has not occurred since 2021. This was counterbalanced by little movement in the number of new hires and layoffs though. Moving on to the ADP and non-farm reports, both missed their corresponding forecasts and we also saw a minor uptick in the unemployment rate to 4.3%. While the incoming data was a bit of a letdown for investors, it must be weighed against the backdrop of a historically low level of unemployment and strong wage growth; as such, more remains to be seen from this perspective. After the insights gleaned from this week’s jobs data, a September interest rate cut is now considered a lock and looking ahead, the futures market is leaning towards two more cuts to conclude the year.

The resilience that equities have demonstrated in recent weeks was once again on full display, as the asset class showed signs of demand throughout the week, yet the end results were mixed – an interesting contrast of sorts. The Nasdaq 100 fared the best of the bunch, rising 1.1% – mainly due to the aforementioned news impacting Apple and Google, in conjunction with a very strong earnings report from Broadcom, who reported record levels of quarterly revenue and free cash flow in their Q3 earnings release on Thursday (up 22% year-over-year). The icing on the cake was the announcement of a new $10 billion dollar chip deal with an undisclosed customer, which was well received by stockholders and fueled investor optimism. The Financial Times speculated this collaboration is likely with OpenAI but this has yet to be substantiated by either firm. The other major indices were split; the Dow Jones Industrial Average posted a modest decline (-0.3%) and the S&P 500 eked out a gain of 0.3% for the week. Switching gears, bond vigilantes were out in full force to start the week and wasted no time driving yields higher, as they digested the potential tariff setback, coupled with lingering concerns surrounding the independence of the Federal Reserve – with the Trump administration looking to oust Fed Governor Lisa Cook, on the grounds of mortgage fraud. Of note, should she be removed, four of the seven governors would be Trump appointed nominees, paving the way for him to potentially implement his lower interest rate agenda. The early run-up in Treasury yields fizzled out over the course of the week, prompted by the above-mentioned macroeconomic news that fell short of expectations, ultimately pushing the 10-year Treasury yield down 10 basis points. Lastly, gold continues its impressive year-to-date performance up 38% or so, as it has benefited from several distinct tailwinds during this time period, such as: lower rates and a falling dollar.

Looking ahead, inflation will be front and center this week with the release of the Consumer Price Index and the Producer Price Index readings on Wednesday and Thursday, respectively. We will also learn more about the health of the consumer with the consumer credit report, preliminary consumer sentiment reading, and initial jobless claims data – all on the docket.

Market Scorecard:	9/5/2025	YTD Price Change
Dow Jones Industrial Average	45,400.86	6.71%
S&P 500 Index	6,481.50	10.20%
NASDAQ Composite	21,700.39	12.37%
Russell 1000 Growth Index	4,518.37	8.46%
Russell 1000 Value Index	1,978.25	7.21%
Russell 2000 Small Cap Index	2,391.05	20.61%
MSCI EAFE Index	2,727.86	17.33%
US 10 Year Treasury Yield	4.08%	-49 basis points
WTI Crude Oil	$61.87	-13.73
Gold $/Oz.	$3,653.30	38.33%