What dominated the US macro and markets in the past 24 hours

With the final trading days of the quarter approaching, the past 24 hours were shaped by three overlapping forces: the late-September data pulse, fiscal headlines around the federal funding deadline on September 30, and quarter-end positioning flows. Together, these influenced risk appetite, interest-rate expectations, and cross-asset volatility even as investors stayed focused on the path of inflation and growth into October.

1) Core inflation lens: the August PCE report

The Bureau of Economic Analysis’ August Personal Consumption Expenditures (PCE) inflation report—typically released on the final business day of the month—was the primary macro focal point. Markets scrutinized the details of core PCE inflation (particularly services ex-housing) and real consumer spending to assess whether disinflation is reasserting itself and how resilient the consumer remains.

  • Policy implications: A cooler trajectory in core PCE would generally reinforce expectations for easier policy over the coming quarters; a firmer print would keep the policy path more data-dependent and could challenge near-term rate-cut pricing.
  • Growth mix: Real spending trends within goods vs. services offer a read on demand rotation and margin pressures for consumer-facing sectors.
  • Wage-price dynamics: The mix between shelter and non-shelter services inflation continues to inform how quickly underlying inflation can converge toward target.

2) Fiscal watch: September 30 funding deadline

Investors monitored negotiations in Washington ahead of the fiscal year-end. The market typically views a brief funding lapse as a growth timing issue rather than a long-term macro shock, but prolonged uncertainty can weigh on sentiment and delay data releases from affected agencies, introducing temporary information gaps for traders and policymakers.

  • Macro channel: A short shutdown tends to shave near-term growth and delay data; a longer event could tighten financial conditions at the margin via confidence effects.
  • Rates and liquidity: Treasury bill yields near potential event windows can reflect a modest premium; auction schedules and cash balances remain in focus.

3) Quarter-end and month-end flows

Rebalancing by pensions and multi-asset funds, corporate buyback blackout windows ahead of earnings, and index changes can influence late-September price action independently of fundamentals. These flows can amplify intraday moves, particularly in rates duration, large-cap equity indices, and FX into the London and New York closes.

  • Equities: Buyback activity is seasonally softer heading into earnings, reducing a key source of demand.
  • Bonds: Duration demand/supply from balanced funds can interact with Treasury market liquidity conditions late in the month.
  • FX: End-of-month hedging can generate transient USD flows, sometimes at odds with macro headlines.

4) Credit and funding conditions

Primary issuance typically slows into quarter-end, with attention on secondary market tone and spreads as a barometer for broader risk conditions. Money markets remain well supported, with front-end moves shaped by policy expectations and bill supply.

5) Energy and commodity backdrop

Energy markets continue to influence the inflation narrative via gasoline and diesel pass-through and expectations for headline CPI prints ahead. Positioning around crude balances, refinery runs, and seasonal demand informs traders’ read-through to consumer inflation expectations into October.

6) Equity sector narratives

Technology and communication services remain sensitive to rates volatility and earnings-duration narratives, while defensives and energy sectors trade off macro uncertainty and commodity trends. Pre-announcement season can lead to idiosyncratic moves, but broad index direction is still tethered to the inflation-growth-policy triad.

Cross-asset considerations

  • Rates: The curvature of the Treasury curve remains a live readout of growth and policy path expectations. Post-PCE repricing often shows most acutely in 2–5 year maturities.
  • Equities: Valuation sensitivity to real yields persists; late-month factor rotations can obscure the underlying macro signal for a session or two.
  • US dollar: Month-end hedging can interact with policy repricing, creating noisy price action that may not fully reflect macro conviction.
  • Volatility: Event risk around data and fiscal headlines can lift implieds; quarter-end can bring supply/demand imbalances in index and single-name options.

Seven-day outlook: key events and how they matter

The coming week spans quarter-end (September 30) and the first days of October, bringing a dense data slate that typically sets the tone for the month. Exact release times and days should be confirmed on official calendars; the items below follow their standard scheduling.

Quarter-end (through Sep 30)

  • Flows and liquidity: Expect rebalancing effects to fade after the close on the 30th. Into the turn, market depth can be patchy around key closes.
  • Fiscal resolution watch: Any clarity on a continuing resolution or lapse in funding can influence near-term risk appetite and data availability.

Conference Board Consumer Confidence (typically Tue, Sep 30)

  • Why it matters: A timely gauge of labor perceptions and inflation expectations from households.
  • Market lens: Weakness could bolster rate-cut expectations but raise earnings resilience questions; strength does the reverse.

ISM Manufacturing and S&P Global PMIs (around Wed, Oct 1)

  • Why it matters: Manufacturing has been a soft spot; new orders, prices paid, and employment sub-indices guide views on goods inflation and inventory cycles.
  • Market lens: A firmer prices-paid component can challenge the disinflation narrative; weakening orders signal caution on growth.

JOLTS Job Openings (around mid-week)

  • Why it matters: Vacancy-to-unemployment ratios capture labor market tightness beyond payroll counts.
  • Market lens: Easing openings usually support the case for lower wage pressure; surprises can move front-end rates.

ADP Employment (typically Wed) and Weekly Jobless Claims (Thu)

  • Why they matter: High-frequency reads ahead of the official jobs report; claims inform on layoffs momentum.
  • Market lens: Noise is common, but large deviations can tilt expectations into Friday’s payrolls.

ISM Services (typically late in the week)

  • Why it matters: Services prices and employment are pivotal for core inflation’s trajectory.
  • Market lens: Hotter services inflation can reprice the policy path; softer prints support disinflation confidence.

US Employment Situation Report (first Friday of the month)

  • Why it matters: Nonfarm payrolls, unemployment rate, and labor force participation anchor the growth-inflation-policy nexus.
  • What to watch:
    • Payroll breadth and revisions, not just the headline change.
    • Average hourly earnings and hours worked for wage and income signals.
    • Sectoral mix to gauge cyclical health (goods vs. services employment).
  • Market lens: A balanced moderation typically supports soft-landing narratives; upside wage surprises can lift yields and pressure duration-sensitive equities.

Fed communications

  • Speeches and interviews: A busy roster often follows key data. Markets will parse remarks for tolerance of recent inflation readings and any guidance on the timing and pace of future policy adjustments.
  • Nowcasts and reaction functions: Watch how officials characterize the split between shelter and non-shelter services inflation and any emphasis on labor-market cooling.

Treasury financing

  • Bill and coupon supply: Weekly bill announcements and month-start coupon calendars inform duration supply. Any shifts in net issuance relative to expectations can sway the curve.
  • Liquidity conditions: As quarter-end effects fade, market depth in rates typically improves into the new month.

Corporate earnings setup

  • Pre-announcements and guidance: The window for Q3 updates opens; margin commentary versus cost pressures is key.
  • Buybacks: Blackout periods ease later in October, but near-term demand remains lighter, leaving equities more sensitive to macro surprises.

Key narratives to track

  • Disinflation durability: Whether core services inflation continues to cool without a severe growth trade-off.
  • Labor-market glide path: Evidence of loosening tightness without an acceleration in layoffs.
  • Growth resilience vs. policy relief: How incoming data balance arguments for earlier easing against concerns about re-acceleration.
  • Fiscal and issuance dynamics: Any interaction between funding headlines, Treasury supply, and term premia.
  • Positioning and flows: The shift from quarter-end technicals to data-led price discovery as October begins.

What would change the narrative

  • A material upside surprise in services inflation or wages that reopens concerns about sticky inflation.
  • Unexpected labor-market deterioration that challenges soft-landing assumptions.
  • Prolonged fiscal disruption that delays key data or meaningfully dents near-term growth.
  • Supply shocks in energy markets that lift headline inflation and inflation expectations.
  • Significant shifts in Treasury issuance plans relative to expectations that affect curves and risk appetite.

Bottom line

The end of September is delivering a potent mix of macro data, fiscal uncertainty, and quarter-end technicals. As those transitory flow effects fade, October’s opening week—headlined by ISM readings and the jobs report—will likely set the tone for how quickly policy expectations can evolve into year-end and how risk assets trade the balance between disinflation progress and growth resilience.