Market Insights

Hard assets like gold, silver and crude oil are rallying with inflation stuck near 3 percent.

The S&P 500 slid 0.3 percent between Friday, September 19, and Friday, September 26. It was the first decline in four weeks. Commodities, on the other hand, were more active:

• Gold rose 2 percent last week to a new all-time high.
• Silver rose 7 percent to a 14-year high.
• Platinum rose 12 percent to an 11-year high.
• Crude oil climbed 4.5 percent. It was the biggest gain since June, although prices remain stuck in a recent range between $61 and $67.

The moves came as economic data reflected strong growth, persistent inflation and wavering demand for government debt. New home sales and durable goods orders rose more than expected, while initial jobless claims fell more than expected. Second-quarter gross domestic product was revised far above estimates.

Meanwhile, the U.S. Treasury sold two-, five- and seven-year notes. All three of the auctions met with lower demand than the previous month. Yields rose despite the Federal Reserve cutting rates on September 17.

Crude oil futures (@CL), daily chart, with select patterns and indicators.

More numbers on Friday showed personal income and spending both above consensus. Core inflation rose 2.9 percent year-over-year, according to the personal consumption expenditure (PCE) price index. It’s up from 2.6 percent in April and has been above the central bank’s 2 percent target for 54 straight months.

“Price increases largely reflect higher tariffs rather than broader price pressures,” Fed Chairman Jerome Powell said on Tuesday. A comment that stocks are “fairly highly valued” weighed on sentiment the rest of the week.

“Near-term risks to inflation are tilted to the upside and risks to employment to the downside—a challenging situation,” he added. “There is no risk-free path.”

Intel Jumps Again

Intel (INTC) jumped to a new 52-week high, continuing to rally the week after receiving a $5 billion investment from Nvidia (NVDA). Bloomberg reported that CEO Lip-Bu Tan is seeking a similar infusion from Apple (AAPL). INTC is on pace for its biggest monthly gain since 1987, up 48 percent so far in September.

Teradyne (TER), another semiconductor-related company, rallied after Susquehanna raised its target price from $133 to $200. The analyst cited growing demand for its circuit-testing systems.

Energy stocks rose the most overall and accounted for four of the 10 biggest gainers in the S&P 500. They followed the move in crude-oil after Ukrainian drone attacks slowed Russian deliveries. The Energy Department’s inventory report was also lower than expected for the second straight week and Reuters reported that OPEC+ may face capacity constraints into yearend.

Utilities were the second-best performing sector. Xcel Energy (XEL) led the group after settling litigation associated with a 2021 wildfire.

Electronic Arts (EA) rallied after The Wall Street Journal reported that it might be acquired by a private-equity group.

Gold and silver miners also continued to climb. Both have more than doubled this year, according to TradeStation data.

Lithium Americas (LAC) spiked 95 percent after Reuters reported the U.S. may take an equity stake.

CarMax Crumbles

CarMax (KMX) had its biggest weekly drop since the pandemic. Its results also seemed to highlight unique forces at work in the market: Same-store sales fell more than expected, used-car inventories were marked lower and loan-loss provisions increased.

At the same time, Cox Automotive hiked its forecast for new car sales. General Motors (GM) and Ford Motor (F) also hit new 52-week highs.

The explanation? Fears of higher tariffs are pushing Americans to buy new cars (according to Cox). That’s hurting demand for used cars sold by KMX.

Freeport-McMoRan (FCX) fell after a mud rush killed at least two workers and halted operations at its Grasberg copper mine in Indonesia.

Kenvue (KVUE) hit a new all-time low as the Trump Administration cited potential risks with Tylenol. KVUE was spun off from Johnson & Johnson (JNJ) in 2023.

The downside in FCX made materials the worst-performing sector last week. KVUE weighed on consumer staples.

Targets Raised

In addition to the Cox report on new cars, last week featured some other noteworthy forecasts:

• BMO Capital raised its price target on the S&P 500 from 6,700 to 7,000, citing consistent earnings in the technology sector.
• FactSet calculated that combined Wall Street price targets imply the index will climb to 7,359 in the next year.
• The Organisation for Economic Co-operation and Development (OECD) raised its 2025 global-growth estimate from 2.9 percent to 3.2 percent. The Paris-based group said economies are proving more resilient to trade disruptions than feared, especially emerging markets.
• Bloomberg reported that U.S. economists have raised third-quarter growth forecasts from 1.1 percent to 1.6 percent.
• Societe General said continued Chinese buying may keep supporting gold prices.
• Cotality noted slowing rent increases for single-family homes. Could that help lower inflation?
• JLL said demand for office space is accelerating rapidly from 2024.
• UBS raised its price target on platinum, saying demand outstrips supply. The new target of $1,350 per ounce (up from $1,200) is still about $200 below the current market price.

S&P 500, daily chart, with select patterns and indicators.

Charting the Market

The S&P 500 last week made a new all-time high half a point below 6,700 before pulling back.

Chart watchers may see few bearish signals. Prices made a higher weekly low versus mid-September and remain above their 8- and 21-day exponential moving averages.

Investors may expect strong momentum with a positive quarter ending tomorrow. In addition, the fourth quarter has been positive in 10 of the last 11 years.

Cboe’s volatility index (VIX) also closed below 18 for the eighth straight week. That may reflect limited selling pressure.

The Week Ahead

This week brings more Fed officials and some important economic data.

Cleveland Fed president Beth Hammack speaks today and Carnival (CCL) reports earnings. Pending home sales are also due.

The Labor Department’s job openings report for August (JOLTS) follows tomorrow, along with Nike (NKE) results in the post market.

Wednesday features ADP’s private-sector payrolls report, the Institute for Supply Management’s manufacturing report and crude-oil inventories. A government shutdown could also begin if lawmakers don’t agree on a new budget or continuing resolution.

Initial jobless claims are on Thursday.

The important non-farm payrolls report is on Friday morning, followed by ISM’s service-sector index.