Kapital Market Brief | September 12 2025

Top news

·     The Federal Reserve is approaching its September decision in a context where the dominant narrative has shifted from stagflation risks to a scenario more consistent with stagnation.

·     Later today, the preliminary University of Michigan Consumer Sentiment Index for September will be released, which market consensus expects to come in around 58.0 points.

·     U.S. President Donald Trump increased pressure on India to suspend its purchases of Russian crude oil, in an attempt to reinforce sanctions against Moscow and condition bilateral energy commitments between the two countries.

·     The U.S. and Japan agreed not to intervene in foreign exchange markets for competitive purposes, with the aim of maintaining financial stability and strengthening bilateral cooperation in the face of global tensions.

·     The U.K. economy recorded modest growth in July, weighed down by lower industrial output and weak consumption, reflecting a weak start to the second half of 2025.

Economic outlook

The Federal Reserve is approaching its September decision in a context where the dominant narrative has shifted from stagflation risks to a scenario more consistent with stagnation. Recent labor data points to a deeper slowdown than expected: the unemployment rate rose to 4.3% in August, recent revisions shaved nearly one million jobs off the previous year’s total, and monthly job growth since mid-2024 has averaged around 40,000 positions—levels close to stagnation. At the same time, the pass-through of tariffs to prices has been more limited than feared, giving the Fed greater room to prioritize labor market stability over inflationary pressures, which, although still above target, appear to stem from transitory shocks. Against this backdrop, consensus anticipates a 25-basis-point cut to the federal funds rate range next week, accompanied by more explicit guidance supporting employment. Nevertheless, the tone of the statement and the updated projections will be critical to assess the Committee’s willingness to accelerate the easing cycle in the coming months. Importantly, market attention will not be focused solely on Washington, as monetary policy meetings will also take place in Canada, the U.K., and Japan in the coming days—shaping a key week for the outlook of global liquidity and interest rate expectations worldwide.

Markets and stocks

Futures of major U.S. indexes traded mixed this morning as investors weighed conflicting signals: on one hand, August inflation was higher than expected, but jobless claims rose to levels not seen since 2021. These signs reinforced expectations that the Federal Reserve will cut rates next week, sustaining risk appetite. In Europe, markets were mostly lower. The ECB, for its part, left rates unchanged, a move interpreted as a sign of caution amid a slowdown. In Asia, sentiment was mixed, with the Nikkei reaching a new record.

In commodities, oil advanced despite concerns over potential weakness in U.S. demand and rising inventories. OPEC+’s decision to raise production quotas has also contributed to price pressures during the week. Gold, meanwhile, traded slightly higher, up 0.4%.

In fixed income, U.S. Treasury yields edged up. The 10-year note hovered around 4.06% and the 2-year around 3.55%.

Corporate news

Warner Bros. Discovery was mentioned in press reports indicating that Paramount Skydance may be preparing an acquisition offer.

Adobe reported quarterly results with revenues of nearly $6 billion and adjusted earnings above projections. Performance was supported by sustained demand for its creative tools and the rollout of new artificial intelligence features.

Super Micro Computer announced it has begun volume shipments of its servers powered by Nvidia Blackwell Ultra technology. With this production, the company expands its offering of solutions geared toward artificial intelligence applications and large-scale data processing.