Housing data, PCE inflation headline packed week for US markets

Policymakers, investors, and households are ready for new economic data releases this week that would make or break stock and crypto markets for the last three months of 2025. 

US stock futures were steady on Monday as investors looked ahead to fresh data and central bank signals. Last week, a Wall Street rally pushed the Dow by 1.05%, the S&P 500 by 1.22%, and the Nasdaq Composite advanced 2.21%, each closing at record highs.

On the crypto end, a bloodbath has wiped over 3% of the digital asset industry’s market cap, which now stands at $3.89 trillion, per Coinmarketcap data. Most top 10 ranking coins are trading in the red after a price correction dropped Bitcoin to $112,800, down from its 24-hour high of $115,834. 

Powell speaks after rate cuts

Federal Reserve Chair Jerome Powell is set to speak in Rhode Island on Tuesday, days after the central bank cut its benchmark interest rate to a range of 4.00% to 4.25%. It was the first time the rates were trimmed since Donald Trump returned to the White House in January.

At a news conference following last week’s decision, Powell said the cut was a “risk management choice “ to protect the economy from inflationary risks. 

“You can think of this, in a way, as a risk management cut,” he told reporters, noting that a “very different picture” of risks was now in play.

The Fed had resisted lowering rates in recent months even though inflation was running way above its 2% target. Powell propounded that tariffs imposed by Trump could drive consumer prices higher, while the US President is asking for more cuts this year, claiming his policies will “not raise inflation.”

Housing market struggles with rates

On Wednesday, the Commerce Department will release August new home sales data, which follows a softening trend in housing sales in July.

New home sales dropped 0.6% to an annualized pace of 652,000 units in July, the Census Bureau reported. June’s pace was revised upward to 656,000 units from 627,000. Regional trends varied, with sales falling in the Midwest and South, holding flat in the Northeast, and jumping in the West.

US home values rose 1.9% in June from a year earlier, the slowest increase since mid-2023, according to the S&P CoreLogic Case-Shiller Home Price Index. That was down from a 2.3% gain in May, calculated using a rolling three-month average.

Durable goods orders could slump, but GDP is resilient

Thursday will reveal August data on durable goods orders, which fell 2.8% to $302.8 billion in July, after another drop of 9.4% in June, according to data from the Census Bureau.

Transportation equipment was the main drag, plunging 9.7% to $101.7 billion. Excluding transportation, new orders rose 1.1% aside from the defense sector, which fell 2.5%. 

Also on the same day, the Commerce Department will publish its revised estimate of second-quarter GDP. The US economy grew at a 3.3% annual rate, stronger than the 3% pace initially reported. This is a rebound from the 0.5% contraction in the first quarter, with “real final sales to private domestic purchasers” climbing 1.9%, up from the 0.7% reported earlier.

The impact of tariffs introduced by the Trump administration helped companies boost imports in the first quarter to avoid higher costs. A subsequent pullback in imports during the second quarter lifted GDP since imports are subtracted from the calculation. 

Existing home sales slated to increase

Housing market watchers will also be looking forward to data from existing home sales for August, due Thursday. In July, sales of previously owned homes rose 2% to an annual pace of 4.01 million units from 3.93 million in June, according to the National Association of Realtors. The pace is weaker than during the 2007-2009 recession caused by the housing collapse.

The median price for existing homes edged up 0.2% year-on-year to $422,400, the 25th straight annual increase. Still, mortgage rates, which recently eased to 6.58% for a 30-year fixed loan, are higher compared to pre-pandemic levels.

PCE inflation to end the week

This business week closes with the latest personal consumption expenditures (PCE) inflation report on Friday. During the press briefing last Wednesday, Fed chair Powell said he expects goods prices to push inflation higher through the end of the year and into 2026. 

“We have begun to see goods prices showing through into higher inflation,” he told reporters. “Those are not very large effects at this point, but we do expect them to continue.”

The CPI rose 2.9% in August compared with a year earlier, the biggest annual increase since January. Inflation has mostly accelerated month-to-month since April, even as the labor market cooled. 

“While the unemployment rate remains low, it has edged up, job gains have slowed, and downside risks to employment have risen at the same time, inflation has risen recently and is somewhat elevated.”

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