Business

Stock market’s fate comes down to the next 14 trading sessions

Published

3 months ago

August 31, 2025

The next few weeks will give Wall Street a clear reading on whether this latest stock market rally will continue — or if it’s doomed to get derailed.

Jobs reports, a key inflation reading and the Federal Reserve’s interest rate decision all hit over the next 14 trading sessions, setting the tone for investors as they return from summer vacations. The events arrive with the stock market seemingly at a crossroads after the S&P 500 Index just posted its weakest monthly gain since March and heads into September, historically its worst month of the year.

At the same time, volatility has vanished, with the Cboe Volatility Index, or VIX, trading above the key 20 level just once since the end of June. The S&P 500 hasn’t suffered a 2% selloff in 91 sessions, its longest stretch since July 2024. It touched another all-time high at 6,501.58 on Aug. 28, and is up 9.8% for the year after soaring 30% since its April 8 low.

“Investors are assuming correctly to be cautious in September,” said Thomas Lee, head of research at Fundstrat Global Advisors. “The Fed is re-embarking on a dovish cutting cycle after a long pause. This makes it tricky for traders to position.”

The long-time stock-market bull sees the S&P 500 losing 5% to 10% in the fall before rebounding to between 6,800 to 7,000 by year-end.

Eerie Calm

Lee isn’t alone in his near-term skepticism. Some of Wall Street’s biggest optimists are growing concerned that the eerie calm is sending a contrarian signal in the face of seasonal weakness. The S&P 500 has lost 0.7% on average in September over the past three decades, and it has posted a monthly decline in four of the last five years, according to data compiled by Bloomberg.

The major market catalysts begin to hit on Friday with the monthly jobs report. This data ended up in the spotlight at the beginning of August, when the Bureau of Labor Statistics marked down nonfarm payrolls for May and June by nearly 260,000. The adjustment set off a tirade by President Donald Trump, who fired the head of the agency and accused her of manipulating the data for political purposes.

After that, the BLS will announce its projected revision to the Current Employment Statistics establishment survey on Sept. 9, which may result in further adjustments to expectations for jobs growth.

Then inflation takes the stage with the consumer price index report arriving on Sept. 11. And on Sept. 17, the Fed will give its policy decision and quarterly interest-rate projections, after which Chair Jerome Powell will hold his press conference. Investors will be looking for any roadmap Powell provides for the trajectory of interest rates. Swaps markets are pricing in roughly 90% odds that the Fed will cut them at this meeting.

Two days later comes “triple witching,” when a large swath of equity-tied options expire, which should amplify volatility.

That’s a lot of uncertainty to process. But traders seem oddly unconcerned about this crucial stretch of data and decisions. Hedge funds and large speculators are shorting the Cboe Volatility Index, or VIX, at rates not seen in three years in a bet the calm will last. And jobs day has a forward implied volatility reading of just 85 basis points, indicating the market is underpricing that risk, according to Stuart Kaiser, Citigroup’s head of US equity trading strategy.

Turbulence Risk

The problem is, this kind of tranquility and extreme positioning has historically foreshadowed a spike in turbulence. That’s what happened in February, when the S&P 500 peaked and volatility jumped on worries about the Trump administration’s tariff plans, which caught pro traders off-sides after coming into 2025 betting that volatility would stay low. Traders also shorted the VIX at extreme levels in July 2024, before the unwinding of the yen carry trade upended global markets that August.

The VIX climbed toward 16 on Friday after touching its lowest levels of 2025, but Wall Street’s chief fear gauge still remains 19% below its one-year average.

Of course, there are fundamental reasons for the S&P 500’s rally. The economy has stayed relatively resilient in the face of Trump’s tariffs, while Corporate America’s profit growth remains strong. That’s left investors the most bullish on US stocks since they peaked in February, with cash levels historically low at 3.9%, according to Bank of America’s latest global fund manager survey.

But here’s the circular problem: As the S&P 500 climbs higher, investors become increasingly concerned that it is overvalued. The index trades at 22 times analysts’ average earnings forecast for the next 12 months. Since 1990, the market was only more expensive at the height of dot-com bubble and the technology euphoria coming out of the depths of the Covid pandemic in 2020.

“We’re buyers of big tech,” said Tatyana Bunich, president and founder of Financial 1 Tax. “But those shares are very pricey right now, so we’re holding some cash on the sidelines and waiting for any decent pullback before we add more to that position.”

Another well-known bull, Ed Yardeni of eponymous firm Yardeni Research, is questioning whether the Fed will even cut rates in September, which would hit the stock market hard, at least temporarily. His reason? Inflation remains a persistent risk.

“I expect this stock rally to stall soon,” Yardeni said. “The market is discounting a lot of happy news, so if CPI is hot and there’s a strong jobs report, traders suddenly may conclude rate cuts aren’t necessarily a done deal, which may lead to a brief selloff. But stocks will recover once traders realize the Fed can’t cut rates by much because of a good reason: The economy is still strong.”

Introducing the 2025 Fortune Global 500, the definitive ranking of the biggest companies in the world. Explore this year’s list.

Source link

Business

Netflix lines up $59 billion of debt for Warner Bros. deal

Published

1 minute ago

December 5, 2025

Jace Porter

Netflix Inc. has lined up $59 billion of financing from Wall Street banks to help support its planned acquisition of Warner Bros. Discovery Inc., which would make it one of the largest ever loans of its kind.

Wells Fargo & Co., BNP Paribas SA and HSBC Plc are providing the unsecured bridge loan, according to a statement Friday, a type of financing that is typically replaced with more permanent debt such as corporate bonds.

Under the deal announced Friday, Warner Bros. shareholders will receive $27.75 a share in cash and stock in Netflix. The total equity value of the deal is $72 billion, while the enterprise value of the deal is about $82.7 billion.

Bridge loans are a crucial step for banks in building relationships with companies to win higher-paying mandates down the road.

A loan of $59 billion would rank among the biggest of its type, Anheuser-Busch InBev SA obtained $75 billion of loans to back its acquisition of SABMiller Plc in 2015, the largest ever bridge financing, according to data compiled by Bloomberg.

Source link

Business

Stocks: Facing a vast wave of incoming liquidity, the S&P 500 prepares to surf to a new record high

Published

33 minutes ago

December 5, 2025

Jace Porter

The S&P 500 index ticked up 0.3% yesterday, its eighth straight upward trading session. It is now less than half a percentage point away from its record high, and futures were pointing marginally up again this morning. Nasdaq 100 futures were even more optimistic, up 0.39% before the open in New York. The VIX “fear” index (which measures volatility) has sunk 12.6% this month, indicating that investors seem to have settled in for a calm, quiet, risk-on holiday season.

They have reason to be happy. Washington is preparing a wave of incoming liquidity that is likely to generate fresh demand for equities.

For instance, the CME FedWatch index shows an 87% chance that the U.S. Federal Reserve will deliver an interest rate cut next week, delivering a new round of cheaper money. Further cuts are expected in 2026.

Furthermore, Wall Street largely expects President Trump to announce that Kevin Hassett will replace Fed chairman Jerome Powell in May—and Hassett is widely regarded as a dove who will lean in favor of further rate cuts.

Elsewhere, the Fed has begun a series of “reserve management purchases,” a program in which the central bank will buy short-term T-bills—a move that will add more liquidity to markets generally.

Banks, brokers and trading platforms are also lining up to handle ‘Trump Accounts,’ into which the U.S. government will deposit $1,000 for every child. The trust fund can be invested in low-cost stock index trackers—a new source of investment demand coming online in the back half of 2026.

So it’s no surprise that nine major investment banks polled by the Financial Times expect stocks to rise in 2026; the average of their estimates is by 10%.

The Congressional Budget Office also estimates that the One Big Beautiful Bill Act will add 0.9% to U.S. GDP next year largely because it allows companies to immediately deduct capital expenditures from their taxes—spurring a huge round of corporate spending.

With all that fresh money on the horizon, it’s clear why markets have shrugged off their worries about AI and Bitcoin. The only shock will be if the S&P fails to hit a new all-time high by the end of the year.

Here’s a snapshot of the markets ahead of the opening bell in New York this morning:

S&P 500 futures were up 0.2% this morning. The last session closed up 0.3%.
STOXX Europe 600 was up 0.3% in early trading.
The U.K.’s FTSE 100 was up 0.14% in early trading.
Japan’s Nikkei 225 was up 2.33%.
China’s CSI 300 was up 0.34%.
The South Korea KOSPI was down 0.19%.
India’s NIFTY 50 is up 0.18%.
Bitcoin was flat at $93K.

Source link

Business

Gen Z fears AI will upend careers. Can leaders change the narrative?

Published

1 hour ago

December 5, 2025

Jace Porter

Good morning. Are you communicating the purpose of AI with your younger employees? According to new data from Harvard, most fear AI is going to take their jobs.

The Institute of Politics at Harvard Kennedy School released the fall 2025 Harvard Youth Poll on Thursday, which finds a generation under profound strain. The nationwide survey of 2,040 Americans between 18 and 29 years old was conducted from Nov. 3–7. For these respondents, instability—financial, political, and interpersonal—has become a defining feature of daily life.

Young Americans see AI as more likely to take something away than to create something new. A majority (59%) see AI as a threat to their job prospects, more than immigration (31%) or outsourcing of jobs to other countries (48%).

Nearly 45% say AI will reduce opportunities, while only 14% expect gains. Another 17% foresee no change and 23% are unsure—and this holds across education levels and gender.

In addition, young people fear AI will undermine the meaning of work. About 41% say AI will make work less meaningful, compared to 14% who say it will make work more meaningful and 19% who think it will make no difference; a quarter (25%) say they are unsure.

In my conversations this year with CFOs and industry experts, many have said that the goal of using AI is to remove the mundane and manual aspects of work in order to create more meaningful, thought‑provoking opportunities. However, that message does not yet seem to be resonating with younger employees.

There is a lot of public discussion and widespread fear that AI will mostly take away jobs, but research by McKinsey Global Institute released last week offers a different perspective. According to the report, AI could, in theory, automate about 57% of U.S. work hours, but that figure measures the technical potential in tasks, not the inevitable loss of jobs, as Fortune reported.

Instead of mass replacement, McKinsey researchers argue the future of work will be defined by partnerships among people, agents, and robots—all powered by AI, but dependent on human guidance and organizational redesign. The primary reason AI will not result in half the workforce being immediately sidelined is the enduring relevance of human skills.

The Harvard poll also found young people have greater trust in AI for school and work tasks (52% overall, 63% among college students) and for learning or tutoring (48% overall, 63% among college students). But trust drops sharply for personal matters.

Young employees are considered AI natives. However, it is important to recognize that they have not experienced as many major technology shifts as more seasoned employees—like the dawn of the internet. It’s not to say that AI won’t change the workforce, but there’s still room and need for humans. It’s up to leaders to clearly communicate how AI will change roles, which tasks it will automate, and also provide ongoing training and guidance on how employees can still grow their careers in an AI-powered workplace.

Have a good weekend. See you on Monday.

SherylEstrada
sheryl.estrada@fortune.com

Leaderboard

Fortune 500 Power Moves

Amanda Brimmer was appointed CFO of leasing advisory and head of corporatedevelopment at JLL (No. 188), a global commercial real estate and investment management company. Reporting to JLL CFO Kelly Howe, Brimmer will partner with business leaders globally to drive financial growth and performance. Brimmer brings more than two decades of experience from Boston Consulting Group, where she most recently served as managing director and senior partner.

Galagher Jeff was appointed EVP and CFO of ARKO Corp. (No. 488), one of the largest convenience store operators and fuel wholesalers in the U.S., effective Dec. 1. Jeff most recently served as EVP and CFO for Murphy USA, Inc. Before that, he spent nearly 15 years in senior and executive finance roles with retailers, including Dollar Tree Stores, Inc., Advance Auto Parts, Inc. and Walmart Stores, Inc., in addition to a decade-long career in finance and strategy consulting at organizations including KPMG and Ernst & Young.

Every Friday morning, the weekly Fortune 500 Power Moves column tracks Fortune 500 company C-suite shifts—see the most recent edition.

More notable moves this week:

Barbara Larson, CFO of SentinelOne, a cybersecurity company, will transition from her role to pursue an opportunity outside of the cybersecurity industry. Larson will continue to serve in her role through mid-January 2026. Upon her departure, Barry Padgett, chief growth officer, will serve as interim CFO. Barry has more than 25 years of experience in operational leadership at enterprise software companies, including SAP and Stripe. SentinelOne has initiated a search for its next CFO.

Jessica Ross was appointed CFO of GitLab Inc. (Nasdaq: GTLB), a DevSecOps platform, effective Jan. 15. Ross joins the company from Frontdoor, where she served as CFO. She has more than 25 years of experience in finance, accounting, and operational leadership at companies like Salesforce and Stitch Fix, and spent 12 years in public accounting at Arthur Andersen and Deloitte.

Michele Allen was appointed CFO of Jersey Mike’s Subs, a franchisor of fast-casual sandwich shops, effective Dec. 1. Allen succeeds Walter Tombs, who is retiring from Jersey Mike’s in January after 26 years with the company. Allen brings more than 25 years of financial leadership experience. Most recently, she served as CFO and head of strategy at Wyndham Hotels & Resorts. Allen began her career with Deloitte as an auditor.

Nick Tressler was appointed CFO of Vistagen (Nasdaq: VTGN), a late clinical-stage biopharmaceutical company, effective Dec. 1. Tressler brings over 20 years of financial leadership experience. Most recently, he served as CFO of DYNEX Technologies, and before that, he was the CFO at American Gene Technologies, International, and Senseonics Holdings, Inc. Tressler has also held senior finance roles at several biopharmaceutical companies.

Mike Lenihan was appointed CFO of Texas Roadhouse, Inc. (NasdaqGS: TXRH), a restaurant company, effective Dec. 3. Keith Humpich, who served as interim CFO, was appointed chief accounting and financial services officer of the company. Lenihan has nearly 30 years of finance experience, including the past 22 years in the restaurant industry. Most recently, he served as the CFO at CKE Restaurants, Inc.

Big Deal

The ADP National Employment Report, released on Dec. 3, indicated that private-sector employment declined by 32,000 jobs in November. ADP found that job creation has been flat during the second half of 2025, while pay growth has continued its downward trend. In November, hiring was particularly weak in manufacturing, professional and business services, information, and construction.

“Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment,” said Nela Richardson, chief economist at ADP, in a statement. “And while November’s slowdown was broad-based, it was led by a pullback among small businesses.”

ADP’s report is an independent measure of labor market conditions based on anonymized weekly payroll data from more than 26 million private-sector employees in the U.S. The next major U.S. Jobs Report (Employment Situation) for November is scheduled for release on Dec. 16 by the Bureau of Labor Statistics.

Going deeper

Here are four Fortune weekend reads:

Overheard

“The Fed no more ‘determines’ interest rates than a meteorologist determines the weather.”

—Alexander William Salter states in a Fortune opinion piece. Salter is a senior fellow with the Independent Institute and an economics professor in the Rawls College of Business at Texas Tech University. He writes: “The Fed doesn’t set interest rates. As powerful as America’s central bank is, it’s still just one player in a globe-spanning ocean of financial markets. Instead, the Fed sets targets for short-term interest rates. Those target rates indicate the Fed’s general monetary policy stance, but they are not the substance of monetary policy.”

Source link