Both the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) secured intraday all-time highs on Friday, although the former later finished the day slightly in the red.
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That comes after a disappointing print from the University of Michigan’s Index of Consumer Sentiment, which showed a preliminary September reading of 55.4, below the estimate of 58.2 and falling from 58.2 in August. A reading of 80 or higher indicates consumer optimism, while a reading of 60 or below indicates pessimism.
“Consumers continue to note multiple vulnerabilities in the economy, with rising risks to business conditions, labor markets, and inflation,” said Surveys of Consumers Director Joanne Hsu. “Likewise, consumers perceive risks to their pocketbooks as well; current and expected personal finances both eased about 8% this month.”
Furthermore, UM survey respondents’ average year-ahead inflation expectation remained unchanged at 4.8%, although that remains well above August’s Consumer Price Index (CPI) and core CPI of 2.9% and 3.1%, respectively. Additionally, long-term inflation expectations rose to 3.9% from 3.5% in August.
Next week will bring the highly-anticipated September 16-17 Federal Open Market Committee (FOMC) meeting, where the central bank is widely expected to cut rates by 25bps. A 50 bps rate cut is also on the table with 5.6% odds, according to CME’s FedWatch tool.
Fed Chair Jerome Powell’s term is set to end in May 2026, and preparations are underway to find a suitable candidate. On Friday, Treasury Secretary Scott Bessent interviewed BlackRock executive Rick Rieder, discussing topics like monetary policy and the structure of the Fed, according to an administration official. Bessent left the meeting impressed, although Fed Governor Christopher Waller is still the top contender, according to prediction platform Polymarket.
Meanwhile, the U.S. and China will hold their fourth round of in-person trade talks in Madrid between September 14–17. Treasury Secretary Scott Bessent will represent the U.S. in discussions with Chinese Vice Premier He Lifeng and other senior officials. According to the U.S. Treasury, the two countries will “discuss key national security, economic and trade issues of mutual interest, including TikTok and cooperating on money-laundering networks that threaten both the United States and China.”
The S&P 500 (SPX) closed with a 0.05% loss, while the Nasdaq 100 (NDX) returned 0.42%.
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