Liquidity Holds the Stage: Dollar Retreats, Treasuries Ease, Equities Steady

Monday, September 29, 2025, saw North American markets navigate a session dominated by ample liquidity, cautious investor sentiment, and fiscal uncertainties. Traders and investors faced a blend of currency fluctuations, Treasury yield adjustments, and selective equity buying, all underpinned by a robust liquidity backdrop.

Steady Liquidity Supports Market Flow

Liquidity conditions remained highly supportive, allowing markets to absorb news and data without major disruptions. Measures of U.S. financial conditions indicated loose but stable market environments, with money supply remaining strong and ample reserves in the system. This abundance of liquidity helped maintain orderly trading, narrow bid-ask spreads, and robust volume across equities and bonds.

Dollar Slides Amid Fiscal and Economic Concerns

The U.S. Dollar Index (DXY) ended Monday at 97.964, down 0.218 points (-0.22%) from the previous close. The dollar’s modest decline reflects investor caution ahead of October 1, the start of the fiscal year, and anticipation of key economic data such as payrolls and consumer spending. While slightly weaker against the yen, euro, and pound, the DXY retains a modest weekly gain, signaling that the dollar’s underlying strength remains intact despite short-term pressures.

Treasury Yields Easing

The 10-year U.S. Treasury yield fell to 4.15%, down 3 basis points from the previous session. This easing points to a flight to safety as investors sought longer-duration Treasuries amid fiscal uncertainties. Bond prices rose in tandem, indicating demand for secure income streams and reflecting caution about near-term growth and fiscal developments.

Equities Remain Resilient

U.S. equities showed stability despite dollar softness and lower yields:

S&P 500 ETF (SPY): $663.63, with strong intraday volume

NASDAQ 100: $24,611.35 (+0.44%)

Dow Jones Industrial Average: $46,316.08 (+0.15%)


The resilience in equities was supported by abundant liquidity and a balanced interest in both cyclical and defensive sectors, suggesting cautious optimism among investors.

Key Market Drivers

1. Fiscal Year Transition: Approaching October 1, investors remained wary of potential government shutdowns.


2. Economic Data: Anticipation of payrolls, consumer spending, and durable goods reports shaped positioning.


3. Treasury Yield Movements: The slight decline in yields reflected safe-haven demand and cautious sentiment.


4. Currency Dynamics: The dollar’s retreat illustrates the market’s sensitivity to both domestic and global conditions.


5. Liquidity: Ample reserves and money supply underpinned market stability and orderly trading.

Monday’s session underscored the power of liquidity in shaping market behavior. While the U.S. dollar experienced a mild pullback and Treasury yields softened, equities held firm, supported by abundant liquidity and measured investor confidence. Looking ahead, fiscal developments and upcoming economic data are expected to continue steering market sentiment, with liquidity remaining a key stabilizing factor for traders navigating early Q4 market dynamics.