Kapital Market Brief | September 26 2025

Top news

·     In the U.S., consumption maintained a solid pace at the start of the third quarter, and core PCE inflation remained elevated.

·     In Mexico, the trade balance showed a larger deficit in August.

·     U.S. President Donald Trump announced on Thursday a new round of tariffs on imports, including a 100% levy on brand-name pharmaceuticals and a 25% tariff on heavy-duty trucks, which will take effect next week.

·     The lack of a budget agreement in Congress increases the risk of a U.S. government shutdown, which could heighten political tension and weigh on economic activity.

·     The Bank of Japan will likely raise its benchmark interest rate at least four more times, reaching 1.5% before Governor Kazuo Ueda’s term ends in early 2028, former BOJ board member Makoto Sakurai told Reuters.

Economic outlook

In the U.S., consumption maintained a solid pace at the start of the third quarter, and core PCE inflation remained elevated. In August, disposable personal income and personal consumption expenditures rose 0.4% and 0.6% nominally, respectively, while in real terms they increased 0.1% and 0.4%. Meanwhile, annual personal consumption expenditures (PCE) inflation, the Fed’s preferred measure for its inflation target, stood at 2.7%, slightly above the 2.6% of the previous month and in line with market consensus. The core index, which excludes food and energy, remained at 2.9% year-on-year, unchanged from July. On a monthly basis, headline PCE inflation rose 0.3% and core PCE 0.2%. Overall, the figures show that the U.S. economy continues to display dynamism in its main driver (household consumption) while core inflation remains persistently above the central bank’s target. In this sense, the persistence of core inflation reinforces upside risks for the inflation outlook, even as the labor market shows signs of cooling and the Federal Reserve has begun to cut its policy rate.

In Mexico, the trade balance showed a larger deficit in August. In the eighth month of the year, a negative balance of -$1.944 billion was recorded, contrasting with the small deficit of just -$17 million observed in July. In August 2025, exports grew 7.4% y/y to reach $55.718 billion, driven by an 8.9% increase in non-oil exports despite a -26.3% drop in oil exports. Within this, manufacturing exports rose 9.0% y/y, although auto exports fell -1.2% y/y, while agricultural exports declined -14.3% y/y and extractive exports surged 41.3% y/y. Imports totaled $57.662 billion, with a slight -0.2% y/y reduction. By category, consumer goods imports fell -5.8% y/y, capital goods imports dropped -7.4% y/y, while intermediate goods imports rose 1.8% y/y. Thus, from January to August 2025, the trade balance showed a deficit of -$528 million, significantly narrower than the -$17.981 billion deficit reported in the same period of 2024.

Markets and stocks

Futures of major U.S. indices traded higher this morning, supported by inflation data in line with expectations. The August PCE index rose 0.3% m/m and 2.7% y/y, while the core measure increased 0.2% and 2.9%, respectively. The market continues to price in two 25-basis-point cuts this year, albeit with lower probability than in recent days. In Europe, equities advanced following U.S. tariff announcements that primarily hit the pharmaceutical sector. In Asia, markets closed broadly lower after the same tariff news.

In commodities, oil was on track to close the week up more than 4%. Brent traded at $69.64 per barrel and WTI at $65.30, supported by Russia’s decision to restrict diesel and gasoline exports after Ukrainian attacks on its infrastructure. Gold, meanwhile, held steady around $3,753 per ounce, after reaching record highs earlier in the week.

In fixed income, the 10-year Treasury yield stood at 4.16%, while the 2-year yield held at 3.65%.

Corporate news

Paccar, the U.S. maker of Peterbilt and Kenworth trucks, rallied strongly after Donald Trump announced a 25% tariff on heavy-duty truck imports, a measure that favors domestic producers.

Intel gained after reports that it is seeking new investments from Apple and TSMC in an effort to strengthen its position amid challenges in the chip industry.

Concentrix, a U.S. technology services and customer experience management company, fell more than 20% after posting quarterly results below expectations, reflecting margin pressures and business disruptions.