top of page

Lower Interest Rates Boost Smaller Company Stocks and Home Sales, and the Ironic Amish

  • Writer: Doug MacGray
    Doug MacGray
  • Sep 1
  • 3 min read

Updated: Sep 7

August 31, 2025


INVESTORS SELL BEFORE LONG-WEEKEND: Some fear in the artificial intelligence sector caused a bit of a sell-off on Friday, causing the week for the S&P 500 and the NASDAQ Composite indices to end in the red (the NASDAQ was down -0.19%). Dell Technologies, Marvell Technology, Oracle Corp., and NVIDIA Corp. all fell on Friday. For the month, all stock indices ended higher once again. August was led by the small and mid-cap companies. The Russell 2000, and index of small and mid-cap stocks, rose 7.14% during August compared to the S&P 500 which rose 2.03%, and the NASDAQ which rose 1.65%. Small and mid-cap stocks have suffered from higher interest rates, and the likelihood of a change in that landscape has buoyed those stock prices. We will see if that continues.


ree

LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.


ree

PCE INFLATION INDEX: The Fed watches the Personal Consumption Expenditures (PCE) index closely, an alternative inflation measure. In July, the PCE price index showed a 2.6% year over year increase. This is the same as last month. The "core" PCE (excludes food and energy) was up 2.9% after registering at 2.8% in June.


U.S. PERSONAL INCOME RISES AT HEALTHY RATE: In July, personal income for Americans rose by 0.4%. The month was led by private-sector wages which rose 0.7%. Personal consumption rose by 0.5% in July.


NEW ORDERS FOR DURABLE GOODS DECLINED IN JULY, BUT....: In July, new orders for durable goods declined by 2.8%. This follows a 9.4% drop in June. But these two months of declines have been caused by the aircraft sector. Qatar Airways made a massive order from Boeing after Donald Trump's visit there, which pushed total durable goods orders much higher. The last two months have seen those numbers come back down to earth. If you take aircraft out of the July numbers, the data looks good. Orders for durable goods rose in all major categories such as electrical equipment (2.0%), machinery (1.8%), primary metals (1.5%), fabricated metal products (0.7%), and computers and electronic products (0.6%).


U.S. HOUSING MARKET: The 30-year mortgage rate has been falling and hit the low for the year last week at 6.56%. Sales of existing homes increased in July by 2% from the previous month. A survey of economists by the Wall Street Journal predicted a drop of 0.5%, so this was unexpected. Home-price growth has been slowing and even falling in many parts of the country. The combination of prices settling and even falling, combined with lower mortgage rates may be priming the residential real estate market for a boost. The inventory of unsold new and existing homes reached its highest level since late 2019 according to Realtor.com.


ree


THE AMISH HAVE A SENSE OF IRONY: I went to a two day conference last week in the heart of Amish country near Lancaster, PA. We had dinner at a restaurant in the area. When I went to park, I dutifully avoided the two spots that are for electric vehicles only. When I came back, I found this parked in one of the electric car parking spots.



Have a great week!



Our purpose is to honor God by helping our clients see the objective, find the path, and navigate past the obstacles to a more prosperous future.



ree

Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax

(610) 628 4545



"The greatest wealth is to live content with little, for there is never want where the mind is satisfied." Lucretius


"Command them to do good, to be rich in good deeds, and to be generous and willing to share." I Timothy 6:18


SOURCES:

INVESTORS SELL BEFORE LONG-WEEKEND: YCharts.com


(c) 2025 Anno Domini, Stonecrop Wealth Advisors, LLC, All Rights Reserved

Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.


SDG

*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.


Comments

bottom of page