29 Sept 2025
July saw an unexpected improvement in durable goods orders, signaling a potential revival in corporate investment despite previous caution. Simultaneously, the U.S. housing market experienced its weakest spring season in thirteen years, with prices declining for the fifth consecutive month due primarily to high costs and mortgage rates.
Durable goods orders in July showed an unexpected improvement, with the overall figure at -0.28% against a -0.38% forecast and a previous -0.4%. Core durable goods orders, excluding transportation, also increased by 1% compared to the previous month and forecasts. This positive trend indicates that companies are cautiously resuming investment plans as uncertainties regarding tariffs and taxes gradually decrease.
Capital goods orders, excluding aircraft and military hardware, increased by 1.1% in July, a significant recovery after a 0.6% decline the previous month and better than economists' predictions. This growth suggests commercial investment is expected to rise gradually until late 2025, with further sales growth anticipated in 2026 due to favorable tax regulations and clarified tariff policies. Companies, which were hesitant in the first half of the year due to market uncertainties, are now looking to increase capital expenditures, with AI-related spending also contributing to potential productivity gains.
The U.S. Housing Price Index declined by -0.2% in June, marking the fifth consecutive month of slowing price growth and reflecting the weakest spring selling season in 13 years. High housing prices and elevated mortgage rates have made potential buyers cautious, leading to reduced activity and an accumulation of housing inventory in many regions. While some areas like New York (7% annual increase) and Chicago (6% annual increase) show resilience, the overall market appears to have reached an inflection point, with prices now generally decreasing.
Yesterday's stock market exhibited a range-bound performance, with major indices closing slightly positive by 0.1-0.2%. This muted activity suggests a period of consolidation or 'resting' after recent significant rallies. Most sectors closed positively, with Industrials, Healthcare, Financials, and Technology showing slight gains (up to 1%), while Consumer Staples, Energy, Communications, Utilities, and Real Estate were among the laggards.
The dollar index experienced a slight decline yesterday due to ongoing political tensions surrounding efforts to influence the Federal Reserve. A dispute involving attempts to remove a Fed official raises concerns about the Fed's independence, a cornerstone of the U.S. economic system. The market fears that if political pressure can dictate Fed personnel decisions, monetary policy could become aligned with government agendas, undermining the institution's crucial autonomy.
Today is generally a quiet news day, though political developments remain a potential source of market surprises. A significant event scheduled for after market close is Nvidia's earnings report. A positive outcome from this report could significantly influence the S&P 500 and the broader market's performance in the upcoming trading day.
The U.S. economy's resilience hinges on the Federal Reserve's independence from political influence, a principle now tested by ongoing disputes over personnel.
| Item | Description |
|---|---|
| Durable Goods Orders (July) | Better than expected (-0.28% vs -0.38% forecast), signaling renewed corporate investment plans. |
| Core Capital Goods Orders (July) | Strong growth (1.1% increase), indicating a sustained positive commercial investment outlook for 2025-2026. |
| Housing Price Index (June) | Declined -0.2%, marking the 5th consecutive slowdown and the weakest spring sales in 13 years due to high prices/rates. |
| Corporate Investment Outlook | A gradual increase in commercial investment is expected until late 2025, with a stronger rebound in 2026 driven by tax policies and tariff clarity. |
| Fed Independence Concern | Political disputes threatening Fed officials raise fears about the central bank's autonomy and potential alignment of monetary policy with political agendas. |
| Nvidia Earnings Report | The post-market report today is a significant potential market mover for the S&P 500 and overall market performance tomorrow. |
