A view shows the New York Stock Exchange (NYSE) Wall Street entrance in New York City, U.S., April 7, 2025. REUTERS/Kylie Cooper
Index Performance
At the close of LSEG Lipper’s fund-flows week ending September 3, 2025, U.S. broad-based indices traded mixed: S&P 500 TR (+0.37%), Nasdaq (+1.14%), Russell 2000 (+1.04%), and DJIA (-0.3%).
Macro Viewpoint
Brace for impact. The U.S. labor market is losing momentum, increasing concerns over the future of the U.S. economy. August’s ADP Private Payrolls showed a gain of just 54,000 jobs, roughly half of July’s 106,000 increase, while the highly anticipated nonfarm payrolls reported an increase of 22,000, which is extremely short of Reuters’ 75,000 estimate. The unemployment rate pushed up to 4.3%, breaking above the 4.0% to 4.2% range that has held since July 2024. Equity markets held at the beginning of the trading day, but lost momentum in the latter part of the day. In rates, the reaction was swift: two-year Treasury yields dropped 10 bps to 3.49%, while the five-year and 10-year each declined 9 bps to 3.56% and 4.08%, respectively. This week’s labor data may prove to be the tipping point, with investors now laser focused on the September FOMC meeting as the decisive moment for a policy pivot.
Fund Flows by Asset Type
Fund flows across major asset classes finished firmly in the green, reinforcing resilient investor appetite. Money market funds once again dominated the leaderboard, absorbing as staggering $53.3 billion in net inflows, while U.S Taxable Bonds funds added a robust $5.8 billion, and U.S. municipals captured $671 million. Commodities reemerged as standout, accelerating with $4.5 billion in inflows, closely trailed by equites at 4.2 billion. Alternatives registered a modest $59.8 million gain, while mixed assets stood as the lone detractor, posting $285 million in outflows.
Performance by Lipper U.S. Classifications
In Equities, performance was led by more specialized segments. Global Health/Biotech rallied 0.86%, while Precious Metals Equity delivered a standout 5.59% gain, and Telecommunication added 1.27%. On the downside, Utilities (-1.62%), Specialty/miscellaneous (-1.45%), and International Real Estate (-1.62%) unperformed, highlighting continued pressures on yield-sensitive and non-core sectors.
Fixed Income delivered a steady week of performance, with U.S Treasury funds rising 0.65%, outpacing New York Municipal Debt (+0.62%) and Emerging Markets Hard Currency Debt (+0.57%). At the opposite end of the spectrum, U.S. High Yield (+0.16%), Loan Participation (+0.13%) and Specialty Fixed Income (+0.09%) lagged, reflecting more selective risk-taking amid shifting rate expectations.
