Key Points
- Jobs Market Shock: US economy added 911,000 fewer jobs than previously reported through March, marking the largest payroll revision since 2002, while August employment growth slowed to just 22,000 new positions.
- Record Market Highs: The S&P 500 and Nasdaq both achieved multiple record highs during the week, with the Nasdaq logging its 21st record of 2025.
- Gold Breaks New Ground: Gold prices surged to an unprecedented $3,600 per ounce, driven by weak employment data and expectations of Federal Reserve rate cuts.
- Oracle's AI Surge: Oracle shares rocketed 30% after announcing AI-driven cloud revenue projections of $144 billion by 2030, despite missing quarterly earnings estimates.
- Inflation Rises: August CPI inflation increased to 2.9% annually, up from July's 2.7%, complicating the Federal Reserve's rate cut path ahead of next week's policy meeting.
Overview
The week of September 8-12, 2025, delivered a complex mix of encouraging market records and concerning economic signals that highlighted the delicate balance facing investors and policymakers. While major equity indices continued their impressive 2025 rally with multiple record highs, underlying economic data revealed significant weakness in the labor market that had been previously masked by statistical revisions. The revelation that the US economy created nearly one million fewer jobs than initially reported through March sent ripples through financial markets, reinforcing expectations for Federal Reserve rate cuts while simultaneously raising questions about the true strength of the economic foundation supporting current market valuations. This backdrop of statistical uncertainty, combined with rising inflation and robust corporate earnings from technology leaders, created a nuanced investment environment where traditional correlations between economic data and market performance appeared increasingly disconnected.
Financial Markets Weekly Recap
Equities
Market Indices: The S&P 500 delivered impressive performance during the week, achieving multiple record highs and gaining approximately 1.5% to close above 6,500 points. The index has now recorded 21 record closes in 2025, significantly outpacing historical averages. The Nasdaq Composite followed suit with its own series of records, logging its 21st record of the year and closing above 580 points. The technology-heavy index benefited from strong performance in artificial intelligence and cloud computing stocks, particularly after Oracle's stunning after-hours surge.
Sector Performance: Technology stocks dominated market gains, with the Magnificent Seven group (excluding Apple) leading the charge. Alphabet bounced 2%, while Meta, Nvidia, and Amazon all gained approximately 1% during Tuesday's session alone. The AI infrastructure sector saw particularly strong performance, with companies like Nebius Group experiencing dramatic gains following major contract announcements.
Corporate Highlights:
- Oracle: The database giant delivered the week's most spectacular performance, surging 30% in after-hours trading following its earnings announcement. Despite missing first-quarter expectations with adjusted earnings per share of $1.47 versus $1.48 expected and revenue of $14.93 billion versus $15.04 billion expected, Oracle's stock soared on the strength of its remaining performance obligations (RPO), which jumped 359% to $455 billion. CEO Safra Catz announced that Oracle Cloud Infrastructure revenue is projected to rise 77% to $18 billion this fiscal year, then escalate to $32 billion, $64 billion, $114 billion, and ultimately $144 billion over the following four years.
- Apple: Shares declined 1.5% following the company's annual product event, where it unveiled an extra-slim iPhone Air, iPhone Pro with extended battery life, updated AirPods Pro 3 with live translation capabilities, and a refreshed Apple Watch lineup. The muted investor reaction followed historical patterns where Apple shares tend to dip during hardware launch events as traders "sell the news."
- GameStop: The meme stock favorite posted impressive results, with shares rising 12% after reporting Q2 fiscal 2025 earnings. The company reported adjusted earnings per share of $0.25, up from $0.01 the previous year, with revenue jumping 21.8% to $972.2 million. Perhaps most notably, GameStop disclosed Bitcoin holdings valued at $528.6 million at quarter's end, contributing an unrealized gain of $28.6 million to the company's results.
- Adobe: The creative software giant jumped 4% after delivering a double beat in its Q3 fiscal 2025 results. Adobe reported non-GAAP earnings per share of $5.31, beating the $5.18 consensus estimate by 2.51%, while revenue reached $5.99 billion, surpassing the expected $5.91 billion. The company's AI-influenced annualized recurring revenue (ARR) surpassed $5 billion, demonstrating strong adoption of its artificial intelligence features.
Initial Public Offerings
The week marked a significant moment for the IPO market with two major debuts:
- Klarna (KLAR): The Swedish buy-now-pay-later company made a solid debut on the New York Stock Exchange, with shares rising 15% on their first day of trading. Klarna priced its IPO at $40 per share, above the expected $35-$37 range, raising $1.37 billion and achieving a market valuation of approximately $17.3 billion. The stock opened at $52 before settling at $45.82 by the close.
- Figure Technology (FIGR): The blockchain-native fintech company soared 25% on its IPO day, hitting a $6.6 billion valuation. Figure raised $787.5 million by pricing shares at $25, above the expected $20-$22 range. The company, which specializes in blockchain-enabled home equity lines of credit and operates a digital asset exchange, reported revenue of $340.9 million last year with a profit of $19.9 million.
Currencies
US Dollar: The dollar index experienced volatility throughout the week, initially weakening on poor jobs data before recovering slightly as markets digested the implications of the massive payroll revisions. The significant downward revision to employment figures paradoxically strengthened the dollar in some sessions as investors recognized the potential for the Federal Reserve to maintain a more measured approach to rate cuts.
EUR/USD: The euro quietly pushed through $1.17 during the week, benefiting from the European Central Bank's decision to hold rates steady and growing expectations for US Federal Reserve rate cuts. The ECB's hawkish tone, with President Christine Lagarde noting that growth risks are now more balanced and declaring the disinflationary process "over," supported euro strength against a weakening dollar.
GBP/USD: Sterling remained steady near recent highs above $1.35 throughout the week, supported by relatively strong UK economic data compared to the deteriorating US employment picture.
Commodities
Gold (GLD): The precious metal delivered spectacular performance, breaking through $3,600 per ounce for the first time and reaching record highs of $3,646.29. The surge was driven by weak US labor market data and increasing expectations for Federal Reserve rate cuts. Gold has now risen 38% in 2025, following a 27% increase in 2024, driven by dollar weakness, robust central bank purchases, and increased global uncertainty.
Oil: Crude oil prices remained relatively stable during the week, with markets focused more on monetary policy implications than supply-side dynamics.
Cryptocurrencies
Bitcoin: Bitcoin prices stalled near $111,000 after a relatively quiet weekend, with markets awaiting inflation data and Federal Reserve policy guidance. The cryptocurrency showed resilience despite broader market uncertainty, though it failed to break through key resistance levels.
Ethereum: The second-largest cryptocurrency followed Bitcoin's sideways movement, consolidating recent gains while maintaining support above key technical levels.
Economic Indicators and Policy Developments
US Employment: The week's most significant development was the Bureau of Labor Statistics' preliminary benchmark revision showing the US economy added 911,000 fewer jobs than previously reported over the 12 months ending in March. This revision, the largest since 2002, revealed that monthly job growth averaged 76,000 fewer positions than initially estimated. The revision was accompanied by August's weak jobs report showing just 22,000 new positions created, well below expectations, with the unemployment rate rising to 4.3%.
US Inflation: The Consumer Price Index for August rose 2.9% annually, up from July's 2.7% and marking the highest rate since January. The monthly increase of 0.4% exceeded the expected 0.3% rise, driven by persistent gasoline prices and stronger food inflation. Core inflation, excluding food and energy, remained at 3.1% annually, with economists noting the impact of tariffs on goods prices, particularly in apparel and consumer durables.
Federal Reserve Policy: The combination of weak employment data and rising inflation created a complex backdrop for the Federal Reserve's upcoming September meeting. Markets maintained expectations for a 25-basis-point rate cut, with the CME FedWatch tool showing approximately 90% odds of such a move.
European Central Bank: The ECB held rates unchanged for a second consecutive meeting, with President Christine Lagarde adopting a more hawkish tone by declaring the disinflationary process "over". Updated projections showed eurozone GDP growth of 1.2% in 2025, up from 0.9% in June, while inflation forecasts were nudged slightly higher across the forecast horizon.
Corporate Developments
Nebius Group (NBIS): The Nvidia-backed AI infrastructure company experienced a dramatic 50% surge after announcing a massive deal with Microsoft. The agreement, valued at up to $19.4 billion over five years, will see Nebius provide GPU infrastructure capabilities from its new data center in New Jersey. Microsoft will pay $17.4 billion guaranteed, with options for an additional $2 billion in services.
Market Outlook: As markets head into the final quarter of 2025, several key themes are emerging. The disconnect between robust equity performance and underlying economic weakness, as revealed by employment revisions, suggests potential volatility ahead. The Federal Reserve's policy path remains critical, with markets balancing weak employment data against rising inflation pressures. Technology stocks continue to lead market gains, driven by artificial intelligence adoption and infrastructure investments, though valuations remain elevated by historical standards.
The week's events underscore the importance of data quality and the challenges facing policymakers in navigating complex economic crosscurrents. While market indices continue reaching new highs, the foundation of economic growth appears less solid than previously believed, setting up potential conflicts between market optimism and economic reality in the weeks ahead.