Thursday, September 25, 2025
Markets never really broke into positive territory today, coming off mixed performances from Europe and Asia early in the day. We’ve also sort of run out of near-term catalysts for a refreshment to the bull run, at least until tomorrow’s PCE report comes out, or possibly Jobs Week next, or earnings season kicking off the week after that.
The blue-chip Dow index is -173 points as of the day’s close, -0.38% for the day. The S&P 500 slipped -33 points, -0.50%, while the Nasdaq ran an identical -0.50% (-113 points). The small-cap Russell 2000 was down -25 points today, -1.05%. Bond yields continue to creep higher: +4.17% on the 10-year, +3.66% on the 2-year.
Existing Home Sales +20.5% in August
As expected, we saw a big jump this morning in
Existing Home Sales numbers for August: +20.5%, for a total of 4.00 million seasonally adjusted, annualized units. This is down a smidge from expectations for 4.01 million, but above the consensus estimate for 3.96 million. The Midwest posted the biggest gains per region, though it may be important to point out the median home price in the Midwest is -22% below the national median.
Costco Beats on Q4 Earnings, Stock Slips
Warehouse membership giant
Costco COST reported fiscal Q4 results this afternoon after the close, posting earnings of $5.87 per share versus $5.81 in the Zacks consensus. Revenues were slightly below expectations, however: $86.16 billion versus $86.18 billion anticipated. It’s the third earnings beat in the last four quarters for Costco, but shares are slipping a bit in late trading. Shares are only up around +3% year to date.
What to Expect from the Stock Market Tomorrow
We can sum up tomorrow’s contribution to potential economic impacts to the stock market in one word — or, rather, three letters: PCE.
Personal Consumption Expenditures (PCE), as you likely know, is the Fed’s preferred gauge on inflation, as it gathers data from other sources to make up the comprehensive report. PCE for August hits the tape ahead of Friday’s opening bell.
Personal Income is expected to cool just a tad in August, to +0.3% from +0.4% the prior month. Personal Spending is expected to remain slightly elevated at +0.5%, same as July. The PCE Index month over month forecasts +0.3% on headline, +0.2% core — we saw the reverse in the previous month. Year over year PCE is expected up 10 basis points (bps) to +2.7% month over month, +2.9% on core year over year, in-line with July.
PCE data is among the least revised and surprised monthly economic there is. Perhaps that’s another reason the Fed likes it so much. But last month’s +2.9% on core year over year matches the highs we saw in February of this year and December of last year. And if we do see a tick higher, it would be the loftiest PCE level since March of 2024, when these numbers were moving in quite the opposite direction.
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