As summer winds down, the Federal Reserve has become the center of attention. At the Jackson Hole symposium, Chair Jerome Powell signaled that the Fed appears ready to begin cutting interest rates later this month as inflation trends lower and the labor market shows signs of cooling (Forbes 08/22/25). Treasury yields have eased on the news, giving stocks—particularly smaller companies—room to rally.
While July’s inflation data showed a slight uptick in the Fed’s preferred core PCE measure (from 2.8% to 2.9%) (FRED July ‘25), the broader trajectory still suggests disinflation. The Fed’s task is to guide the economy toward a smooth landing—slowing growth just enough to tame inflation without tipping the U.S. into recession.
Corporate Strength and AI Investment
The economic foundation remains healthy. Second-quarter GDP was revised up to a solid 3.3% annual pace, a reminder that growth is holding firm. Corporate earnings, too, have impressed. The “Magnificent Seven” tech companies continue to deliver outsized results, supported by aggressive capital spending (Reuters, 8/28/25).
Artificial intelligence remains the standout theme. Analysts expect global AI investment to surpass $500 billion in 2026 and potentially reach trillions by the end of the decade (UBS). This spending wave is not just about technology—it represents productivity gains that could fuel a longer runway for corporate profitability and, ultimately, help guide markets toward that smooth landing in sight.
Seasonality and Short-Term Risks
September has historically been the market’s weakest month, with the S&P 500 averaging a small loss since 1950. With valuations already stretched, headlines around tariffs or politics could spark bouts of volatility (CFRA Research, 2025 Seasonality Study).
Still, history also shows that when markets are trending higher heading into September, seasonal weakness tends to be less severe. Short-term turbulence, when it comes, is often just part of the path toward a smooth landing in sight for long-term investors.
Staying Disciplined in the Journey
Policy shifts, political dynamics, and corporate earnings strength create both challenges and opportunities. This is exactly why diversification, and a disciplined plan are so essential. For most households, it remains wise to keep cash positioned for near-term needs while allowing equities to drive long-term growth.
Market pullbacks, while never pleasant, often prove to be healthy entry points.
Keeping Our Eyes on the Horizon
The road ahead is rarely without bumps, but the evidence suggests the U.S. economy is moving toward a smooth landing (Financial Times, 8/24/25)—with the Fed carefully steering, corporate America continuing to deliver, and innovation providing fresh tailwinds.
As always, our focus is on helping you tune out the noise and stay anchored to your long-term goals. Your trust allows us to serve as your guide through these ever-changing conditions, and for that we are deeply grateful. Thank you for your continued confidence and loyalty—it is both our privilege and responsibility to help you navigate the journey toward lasting financial independence.
Best,
Nick
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
No strategy assures success or protects against loss.
Investing involves risks, including possible loss of principal.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Mariner Independent Advisor Network, a registered investment advisor. Mariner Independent Advisor Network and Mercer Partners Wealth Management are separate entities from LPL Financial.
