Key Events: A weakening employment picture
Disappointing employment data validated concerns that the US economy may be slowing; the economy added a paltry 22,000 jobs, well below expectations, while the unemployment rate ticked up to 4.3% (See chart below).
There was positive news, however. Manufacturing new orders grew, while the Atlanta Fed GDPNow model maintained a 3% growth estimate for the third quarter.
While tariff implementation could drive inflation higher, the impact is expected to be “relatively short-lived”. Downside risks to employment appear to outweigh inflation concerns among Fed governors, increasing the likelihood of rate cuts resuming in September.
Market Review: Quiet post-holiday market action
Despite the market’s proclivity for September volatility. markets remained calm this week, US stocks and bonds rose slightly as the weaker employment situation has led to greater confidence in a September rate cut.
Outlook: Weakening labor, weakening economy?
Equity performance remains robust despite a cooling labor market, buoyed by steady capital investment and ongoing fiscal support. Market breadth has improved, with gains spread across styles and market caps. This shift suggests investors are recalibrating toward more balanced exposures after a period of narrow leadership.
We've long flagged the risks of excessive concentration in equity markets, and recent performance hints at a constructive rotation underway. Small-caps surged 10% in the third quarter — twice the return of the S&P 500 — indicating renewed investor interest in previously overlooked areas. This broadening of returns may signal a healthier market regime where fundamentals reassert their influence, valuations regain relevance, and diversification once again proves its worth.
We continue to emphasize the importance of maintaining diversified portfolios across asset classes, market capitalizations, and geographies. This approach positions investors to capture emerging opportunities while managing downside risks in an evolving macro environment.
Weak job creation and a slowing increasing unemployment rate
OneAscent Navigator Outlook: September 2025
This material is intended to be educational in nature , and not as a recommendation of any particular strategy, approach, product or concept for any particular advisor or client. These materials are not intended as any form of substitute for individualized investment advice. The discussion is general in nature, and therefore not intended to recommend or endorse any asset class, security, or technical aspect of any security for the purpose of allowing a reader to use the approach on their own. Before participating in any investment program or making any investment, clients as well as all other readers are encouraged to consult with their own professional advisers, including investment advisers and tax advisors. OneAscent can assist in determining a suitable investment approach for a given individual, which may or may not closely resemble the strategies outlined herein.[1]
[1] Market Returns reference the following indices: Large Cap – S&P 500, Mid Cap Growth – Russell Midcap growth, Mid Cap Value – Russell Midcap Value, Small Cap – Russell 2000, Developed – MSCI EAFE, Emerging – MSCI Emerging Markets, Aggregate – Bloomberg US Aggregate, High Yield – Bloomberg High Yield
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