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L1 Weekly Stock Market News Analysis

September 14th, 2025

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TLDR:

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• Inflation: mixed but easing bias. Core Consumer Price Index (CPI) rose 0.3% m/m (headline 0.4% m/m), keeping the Fed on track to cut next week; traders lean toward multiple cuts in 2025. Producer Price Index, a measure of wholesale costs, unexpectedly fell in August, reinforcing the belief the Fed will cut rates. Increases in jobless clams also had traders betting on more rate cuts.
• Gold at new highs. With softer inflation momentum and cut odds rising, gold notched fresh nominal and inflation-adjusted records this week.
• Oracle shock. Despite a headline miss, Oracle’s stock ripped after guiding OCI to $18B this year and unveiling a $455B backlog (+359% y/y) from four mega deals—cementing AI build-out momentum across data-center suppliers.
• Power is the bottleneck. Oracle’s capex push and energy moves kept attention on cooling, grid, and onsite power (fuel cells now; nuclear later) as core inputs to AI capacity.
• Europe flashpoint. Poland scrambled jets, closed a regional airport, and put air defenses on high alert after Russian drones neared or entered NATO airspace; NATO vowed to reinforce defenses on the eastern flank, and Washington reiterated its commitment to defend all NATO territory.
• Fed decision looms. The Federal Reserve meets this week to set interest rates, with markets expecting a quarter-point cut. Traders are betting on at least two more by year-end, with betting markets assigning roughly a 48% chance of three cuts in total.

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Fed Set to Cut as Inflation Cools

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The Fed is set to cut rates this week after softer inflation readings and clear signs that producer prices are easing. CPI came in cooler, with core inflation trending toward 2.5% YoY, and PPI unexpectedly dropped, underscoring disinflation pressures across supply chains. Markets are weighing the move as the start of a broader easing cycle, with betting odds showing about a 48% chance of three cuts by year-end. The cut itself is expected, but the timing underscores the unusual dynamic — the Fed is loosening policy at a moment when headline GDP prints remain strong.

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AI Spending Powers GDP Growth

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The Fed is likely moving to cut rates even as the economy looks strong on paper. Q2 GDP was revised up to 3.3%, the fastest in nearly two years, driven by consumer spending and a surge in investment tied to the AI build-out. JPMorgan estimates data center spending added about 0.1–0.3% to growth last year and could add another 0.1–0.2% each year through 2026.
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A key shift is in non-residential investment — spending on structures, equipment, and technology rather than housing. It now makes up over 7% of total fixed investment, compared to just 3–4% before 2023. That doubling reflects the scale of the AI race: data centers alone are approaching 1% of GDP, putting them on par with some of the largest industrial booms of past decades.
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Markets are reacting on both sides: utilities are up 9% in six months as investors bet lower rates will boost steady dividend payers, while gold has climbed 21% as a hedge against the risk that cutting rates into strength reignites inflation, reducing the value of the dollar.

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AI Expands Beyond Chips, Uneven Gains Show

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The paradox is that GDP strength is narrow. Growth is clustered in AI-linked sectors and in higher-income households that account for nearly half of consumption. Middle- and lower-income households, by contrast, are seeing flat or declining spending power, increasingly reliant on credit. Policymakers may be celebrating strong prints, but common households are not feeling the gains evenly.
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For investors, this makes the second wave of AI adoption critical. Beyond Nvidia, Microsoft, and Oracle, companies like Symbotic (SYM) are automating warehouses with AI-driven robotics, displacing labor while boosting efficiency. Automatic Data Processing (ADP) is embedding AI into HR and payroll functions, while ServiceNow (NOW) is integrating AI into workflow automation across enterprises. These names highlight how the AI trade is broadening beyond chips and cloud into the everyday fabric of corporate operations — in ways that may widen inequality even as they support productivity gains.
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The upshot: AI-driven capex is propping up GDP and fueling market leaders, but its benefits are narrow and its costs — labor displacement, uneven consumption, and concentrated wealth effects — are already visible. If the AI capex cycle slows, or if households at the middle and bottom retrench further, the headline numbers could roll over far faster than they suggest.

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Beneath the Surface: Recession Signals

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Beneath the surface, the data suggests the U.S. economy is far weaker than the headlines imply. Massive revisions to labor statistics show the U.S. may have entered a recession as early as April 2024, with payroll growth averaging just 71k per month vs. 147k reported, and even negative in August and October last year. Bloomberg’s chief economist now concedes the cycle likely peaked in spring 2024, with the economy either still in contraction or only at the very start of a new cycle. That helps explain why broad consumption looks soft despite booming GDP — the strength is narrowly tied to AI capex and upper-income spending.
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The latest payroll reports reinforce the picture. August saw just 22,000 jobs added, far below expectations, while June was revised into a net loss — the first monthly decline since 2020. Full-time jobs are shrinking, replaced by part-time roles and multiple jobholders, a sign households are stretching to make ends meet. Employers are cutting postings and pulling back on expansion, not because they can’t find workers, but because demand is weakening.
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According to Moody’s and Bank of America, the top 10% of earners now account for nearly half of all U.S. consumption, and their spending has surged 58% since 2020. By contrast, middle- and working-class households have seen flat expenditures, squeezed by inflation, credit costs, and stagnant wage growth. According to the Executive Branch, the good news is that the wages of hourly workers and blue collar jobs have seen their largest increase under any administration in nearly 60 years.
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While headline S&P 500 results looked strong in Q2, nearly all the growth came from mega-cap tech and large banks. Broader sectors — from retail to cyclical industrials — are struggling as pricing power erodes and margins compress. If labor softness continues, the earnings slowdown will widen, leaving today’s elevated valuations on shakier ground.

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Market Impact

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• Rate Cuts This Week
  • Utilities (XLU): Gain from lower borrowing costs and steady dividends.
  • Gold & Silver (GLD, SLV, WPM, KGC): Hedge beneficiaries as investors look for safety.
  • Healthcare (UNH, HUM, CNC): Defensive winners as investors shift toward stable, non-cyclical sectors.

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• AI Spending Driving GDP
  • Nvidia (NVDA), Broadcom (AVGO), Oracle (ORCL): Core beneficiaries of massive data center and cloud buildout.
  • Symbotic (SYM): Warehouse automation leader replacing labor with robotics.
  • Automatic Data Processing (ADP): Leveraging AI to streamline HR and payroll functions.
  • ServiceNow (NOW): Expanding enterprise automation with AI-driven workflow solutions.
  • Fluor (FLR), Quanta Services (PWR), Eaton (ETN): Infrastructure plays tied to power demand and grid upgrades.

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• Jobs Revisions & Wealth Gaps
  • Retailers (WMT, TGT, DG): Pressured by weaker middle-class spending.
  • Luxury Brands (LVMH, RH, TIF): Supported by high-income households driving consumption.
  • Credit & Finance (DFS, COF, UPST, AFRM): Exposed to rising risk if job weakness leads to missed payments.

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Last Week's Stock Market Performance

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• Macro drivers: Soft jobs data + subdued inflation raised expectations for a Fed rate cut this week.
• Sectors: Tech (+0.4% Nasdaq) and consumer discretionary outperformed; materials and health care lagged.
• Notable movers: Tesla +7.4%; Microsoft +1.7% after avoiding EU antitrust fine.
• Weekly performance: S&P 500 +1.6% (best since early Aug.); Nasdaq +2%; Dow +1.1% (first weekly gain in 3).

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Upcoming Events This Week

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The spotlight is on central banks. The Federal Reserve meets Wednesday, with most expecting a quarter-point rate cut — the first since 2022 — though some see a chance of a larger 50 bps move. Powell’s press conference and updated Fed projections will set the tone for the rest of the year.
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Other central banks are also in play: the Bank of Canada is seen cutting rates 25 bps amid weak labor and income data, while the Bank of England and Bank of Japan decisions will be closely watched. In emerging markets, Brazil is expected to hold steady after a long tightening cycle, with Argentina’s GDP and Brazil’s unemployment numbers also due.

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Company News

LevelFields AI Stock Alerts Last Week

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Hecla Mining (HL) +7.8% on S&P SmallCap 600 Addition

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Hecla Mining jumped 7.76% in a single day after announcing it will join the S&P SmallCap 600 Index, effective September 22. Index inclusion often sparks institutional buying as funds benchmarked to the index adjust holdings, providing a tailwind for shares of the silver and gold producer.

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Klarna (KLAR) +15% on $1.37B IPO Debut

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Klarna jumped 15% in its New York debut, closing at $45.82 after pricing at $40. The $1.37B offering gave the Swedish fintech a $17B market value, one of the year’s largest IPOs. Shares briefly spiked 43% as demand ran hot despite Klarna’s steep reset from its $45.6B peak in 2021.
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The firm, once defined by buy-now-pay-later, is repositioning as a full-service bank with savings, checking, and credit cards. First-half 2025 revenue rose to $1.52B, but net losses widened to $153M as provisions for credit risk grew. Management highlighted growing traction in its “fair financing” loans, now 2% of volume and expanding.
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Takeaway: Klarna’s deal shows investor appetite for IPOs is returning. U.S. listings have raised $25.7B YTD, already topping the $20.4B raised in the same period last year, though valuations remain well below pandemic-era highs.

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IPO Market: Retail Traders Join the Surge

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Six IPOs raised over $4B last week, the busiest stretch since 2021. Klarna led with its $1.37B raise, followed by Figure Technology Solutions and Gemini Space Station, while Legence Corp. and Via Transportation posted steadier gains.
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Retail investors played a major role. Bullish sold 20% of its $1.1B IPO to individuals through Robinhood, SoFi, and Webull, fueling a 143% opening pop. Robinhood said demand for IPOs on its platform is five times higher than last year, with issuers now actively reserving shares for retail to drive demand and build loyalty.
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The median IPO opened 31% above its offer price — strong, but without the extreme spikes seen in 2020–21. With StubHub and Netskope set to raise another $2.5B this week, deal flow is accelerating.

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This is not financial advice. All information represent opinions only for informational purposes. Given the vast number of stocks we cover in these reports, assume staff covering stocks have positions in stocks discussed.

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