The Market Update with EP Wealth Advisors Managing Director of Investments, Adam Phillips, CFA®, CAIA, CFP®

Last week was a busy one for markets, with headlines dominated by earnings from several tech giants and major tariff announcements. But two events, in particular—the Federal Reserve’s policy meeting and the latest jobs report—offered critical insight into the current state of the economy. 

 FOMC Meeting: No Cut, But a Rare Dissent 
The Federal Open Market Committee (FOMC) met last week and as widely expected, chose not to cut interest rates. However, for the first time in over three decades, two Federal Reserve governors dissented—voting in favor of a rate cut—while the remaining ten members held rates steady. 

Fed Chair Jerome Powell acknowledged signs of softening job demand during the post-meeting press conference, but he maintained that the overall labor market remained healthy. 

 Jobs Report Tells a Different Story 
Just two days later, the July jobs report suggested a more fragile economic picture. Only 73,000 jobs were added last month—well below expectations. Worse, prior months were revised downward by a net 260,000 jobs, revealing that recent labor market strength may have been overstated. 

The three-month average now sits at just 35,000 new jobs per month, far below the 82,000 monthly average seen during last year’s rate cuts. In response, markets sold off on Friday but have since rebounded as expectations grow that the Fed may now cut rates in September. Current market pricing shows a 90% chance of a cut next month. 

 Outlook and Positioning 
While inflation remains a concern, slowing job growth is strengthening the case for easing rates. With another jobs report and two inflation readings due before the Fed’s next meeting, there’s still more data to digest. 

 At EP Wealth, we continue to maintain a quality bias in our portfolios and remain neutral on stock positioning. As always, if you have questions, please reach out to your advisor. 

Disclosures:

EP Wealth Advisors, LLC (“EP Wealth”) is a leading independent registered investment adviser (“RIA”) on a mission to provide clients with honest and objective advice through personalized financial planning, customized investment portfolios, and integrated tax and estate planning.

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