29 Sept 2025
Yesterday's market saw significant growth across major indices like the Dow Jones, Nasdaq, and S&P 500, with finance and communication sectors leading gains despite high macroeconomic volatility and reduced market fear. Concerns emerged from Wall Street economists regarding the dismissal of the US Census Bureau chief, fearing potential data manipulation by the Trump administration that could influence Federal Reserve policy and market trust in economic indicators.
Major indices like the Dow Jones (500 points), Nasdaq (1.8%), and S&P 500 (1.1%) experienced substantial growth, favoring investors. Finance and communications sectors led gains with approximately 2% growth, while energy was the only non-growing sector.
Despite high intra-day macroeconomic volatility, fear in the market was somewhat reduced, as indicated by fear indices.
President Trump dismissed the US Census Bureau chief, sparking concern among economists and Wall Street analysts. This action raised fears of political control and manipulation of economic data.
Economists worried that manipulated data could influence Federal Reserve decisions, especially given Trump's previous pressure on the Fed to lower interest rates. A potential appointment of a politically aligned successor could erode market confidence in economic data, hindering economic responses and affecting inflationary expectations.
Some economists considered the revision in NFP data normal and predictable, attributing it to factors such as tariffs, seasonal adjustments, weather conditions, and data collection methodologies, which justified the reported difference.
The dollar index continued a steady downward trend, which is anticipated to cause changes in inflation over the next 6 to 12 months. The Trump administration's policies generally favor a weaker dollar, despite stated preferences for a strong dollar.
A weaker dollar could stimulate sectors like technology and manufacturing, which have been under pressure, stabilizing production. Analysis suggests a persistent 10% decline in the dollar index could increase inflation by 1% to 1.5% in the next 6-12 months.
The US services PMI (Purchasing Managers' Index) is a crucial upcoming economic indicator, as most US jobs and business activities are concentrated in the services sector.
If the market lacks confidence in data collection methods and published figures, it could fail to react appropriately to the economic situation, potentially impacting inflation expectations and broader economic stability.
| Insight | Category | Implication |
|---|---|---|
| Positive Market Close | Market Performance | Investor-favorable growth across major indices (Dow Jones, Nasdaq, S&P 500), led by finance and communication sectors. |
| Concerns over Data Manipulation | Political Influence | Dismissal of Census Bureau chief raises fears of political control over economic data, potentially impacting Fed decisions and eroding market trust. |
| Persistent Weak Dollar | Monetary Policy / Currency | Stable downward trend in DXY index aligns with Trump administration's de facto policy, likely stimulating technology and manufacturing, and potentially increasing inflation by 1-1.5% in 6-12 months. |
| Market Trust in Data | Economic Stability | Loss of market confidence in economic data due to political appointments could prevent accurate economic reactions and distort inflation expectations. |
| Normal NFP Revisions | Data Reliability | Some experts view NFP data revisions as normal, attributable to seasonal factors, tariffs, and collection methods, suggesting no immediate concern for data integrity. |
