What We're Seeing: Holiday Pause – 8 September 2025

The Week in Brief

Markets took a breather in early September 2025. With no major data releases or catalysts, equities traded essentially flat for the week. The summer lull extended into the first week of September, as investors awaited the next round of economic releases.

Volume was light, as is typical during the post-Labour Day period. Many participants were still returning from holidays, and there was little urgency to establish new positions.

Sector Action

Defensive sectors edged out their more cyclical counterparts. Utilities, consumer staples, and healthcare outperformed slightly, attracting flows from investors positioning for potential volatility ahead.

Technology consolidated after its strong July and August performance. The sector did not decline meaningfully, but the momentum faded. This is healthy: sustained rallies need periods of rest to build durable support levels.

Commodities

Commodities were mixed during the week. Oil fell modestly on concerns about Chinese demand and rising US inventories. The supply/demand balance remains constructive for crude, but the path higher is not without obstacles.

Gold held steady, maintaining its year-to-date gains. The precious metal continues to benefit from central bank buying and its role as a portfolio diversifier. With real yields still moderating, the opportunity cost of holding gold has decreased.

Our Read

We view this pause as unremarkable. Markets do not move in straight lines, and periods of consolidation are normal. The underlying fundamentals have not changed: growth is positive, inflation is moderating, and the Fed is on track to ease.

The question is what catalysts emerge in the fourth quarter. Earnings season will provide the next reality check on corporate health. The Fed’s September meeting will clarify the pace of rate cuts. And, of course, the US election looms.

For positioning, we are maintaining our allocations without major changes. The risk/reward favours staying invested, but we are holding some dry powder for opportunities that may emerge during any autumn volatility.

What Could Change Our View

A sharp deterioration in economic data would prompt us to reassess. Similarly, an escalation in geopolitical tensions or a policy surprise could shift the calculus. For now, the environment remains supportive, and we are content to ride out the seasonal quiet.

This is informational commentary, not investment advice.