The Swiss voice in the world since 1935
Top stories
Stay in touch with Switzerland

S&P 500, Nasdaq, Dow and Russell 2000 Hit Records: Markets Wrap

(Bloomberg) — Wall Street’s bets that Federal Reserve rate cuts will keep powering Corporate America drove stocks to all-time highs, with traders piling into the riskier corners of the market.

A day after the Fed deployed its first reduction this year and signaled the potential for more saw a rally that lifted the S&P 500, the Nasdaq 100, the Dow Jones Industrial Average and the Russell 2000 to records. It’s the first time since November 2021 that all four major benchmarks closed together at fresh highs. And it’s a rare feat too, occurring on just 25 other days this century.

Subscribe to the Stock Movers Podcast on Apple, Spotify and other Podcast Platforms.

Easier policy is a big source of support for stock bulls at a time when sky-high valuations are confronting bearish seasonality. Over the last 75 years, the S&P 500 has posted an average decline of 0.7% in September, according to LPL Financial. The gauge is up over 2.5% this month.

“The Federal Reserve is cutting interest rates during a time when stocks are at record highs and the economy is still growing,” said Robert Schein at Blanke Schein Wealth Management. “This dynamic is bullish for stocks.”

About 320 shares in the S&P 500 rose, with tech leading the way. The Nasdaq 100 climbed 1%. A $5 billion investment from Nvidia Corp. in Intel Corp. drove the ailing chipmaker up 23%. The Russell 2000 added 2.5%. In late hours, FedEx Corp. reinstated its full-year profit outlook.

Bonds erased gains after data showed jobless claims dropped by the most in nearly four years, suggesting companies are still holding onto workers.

Read: $5 Trillion Triple-Witching Expiry Comes Amid Low Volatility

The lack of any Fed hawkish surprises and the restarting of the rate-cutting cycle could be enough to offset any seasonal headwinds and keep risk appetite on the table, said Adam Turnquist at LPL Financial.

“Big tech stocks tend to outperform during lower interest-rate environments, and financials may see a boost from additional M&A and mortgage activity that may come about from lower rates,” Schein said.

As important as the tech stocks are for the market, Matt Maley at Miller Tabak says he’ll be watching the small caps testing their record high even more closely than the tech sector over the rest of September.

“If they can break above that level in a significant way over the next week or two, it should be very bullish,” Maley said. “If, however, they fail at this level (or slightly above it), it’s going to be quite bearish.”

Read: Trump, Starmer Tout Nvidia, Blackstone Pledges at Tech Meeting

Worries have been mounting for weeks that the S&P 500’s push to record after record risks becoming a bubble, with the index’s swollen valuation cited most often as cause for concern.

Critics point to the tech sector’s outsize influence on this year’s gain, with just five stocks, all megacap tech firms, driving about half of the advance. But a closer look shows tech giants have largely justified their elevated valuations with profit growth.

“Investors have happily bought every dip, largely thanks to AI-driven enthusiasm and consistently strong results from big tech,” said Fawad Razaqzada at City Index and Forex.com. “The concern is that if tech momentum cools, the rest of the market may struggle to justify current valuations.”

That leaves the rally vulnerable if investor confidence wavers, putting the S&P 500 forecast on a more cautious stance, he noted.

“Investors should continue to emphasize diversification and careful stock selection,” said Daniel Skelly at Morgan Stanley’s Wealth Management Market Research & Strategy Team.

“We believe lower interest rates, robust earnings growth, and AI tailwinds will support further potential gains for global equities over the next year,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.

Investors under-allocated to equities and looking to manage timing risks should consider phasing in and using market dips to add exposure to preferred areas, she said.

Her firm estimates that the Fed will cuts rates by a further 75 basis points between now and the first quarter of next year.

At Ameriprise, Anthony Saglimbene says prospects for two more rate cuts in 2025 is a positive for equity markets and risk appetite in general heading into year-end.

But that is “if labor market conditions do not deteriorate much further, consumer spending remains stable, and Big Tech delivers on third-quarter profit expectations.”

While the S&P 500 has fallen 1% on average during Septembers going back to 1971, it has gained 1.2% in the month when the US central bank was reducing borrowing costs and the economy was not contracting, according to Bloomberg Intelligence.

“The proximity of the market to all-time highs suggests that this rate cut is likely non-recessionary in nature, aimed more at supporting continued economic growth rather than countering a downturn,” noted SentimenTrader analysts.

Non-recessionary cuts typically have a more constructive impact on equities, as they can extend bull markets and boost investor confidence, they said.

“Our base case remains that the US economy will remain resilient and that it is unlikely to spiral into a recession,” said David Lefkowitz at UBS Global Wealth Management. “We therefore believe stocks are poised for further gains.”

Corporate Highlights:

Nvidia Corp. agreed to invest $5 billion in Intel Corp. and said the two will co-develop chips for PCs and data centers, a surprise move to help prop up an ailing archrival. Walt Disney Co.’s ABC network is taking Jimmy Kimmel Live! off the air indefinitely amid a backlash to remarks the late-night host made about the killing of Republican activist Charlie Kirk. Cracker Barrel Old Country Store Inc.’s sales guidance missed expectations, showing the brand is still dealing with the fallout from its controversial and short-lived logo change. American Express Co. is boosting the annual fee for its Platinum consumer credit card to $895 — a $200 increase — and adding about $1,500 of potential perks to help customers get over the sticker shock. Novo Nordisk A/S’s diabetes blockbuster Ozempic beat Eli Lilly & Co.’s older drug Trulicity in a real-world survey of certain US patients. The US Federal Trade Commission and seven states sued Live Nation Entertainment Inc. and its Ticketmaster subsidiary for failing to stem the use of automated ticketing bots and large-scale resale operations. Darden Restaurants Inc. rolled out smaller-portioned, lower-priced entrées at select Olive Garden locations during the quarter, part of its strategy to make menus more affordable and boost sales, Chief Executive Officer Rick Cardenas said on an earnings call. GE Healthcare Technologies Inc. is exploring options including the sale of a stake in its China unit, people familiar with the matter said. Uber Technologies Inc. will trial food deliveries by drone with Flytrex Inc., marking the rideshare giant’s return to experiments with logistics. Deutsche Bank AG warned that a broad rollback of financial regulations in the US will give the German lender’s overseas competitor an edge. Hyundai Motor Co. raised its revenue forecast for 2025 while paring profit expectations as the South Korean automaker accelerates investment in the US to mitigate tariff costs. Huawei Technologies Co. unveiled new technology from memory chips to AI accelerators Thursday, outlining publicly for the first time its multiyear plan to challenge Nvidia’s dominance in a growing market. What Bloomberg Strategists say…

“Friday’s call heavy triple-witching September options expiry unpins the SPX from its current range around 6,600. This increases the likelihood of higher intraday volatility.”

—Michael Ball, Macro Strategist, Markets Live. For the full analysis, click here.

Some of the main moves in markets:

Stocks

The S&P 500 rose 0.5% as of 4 p.m. New York time The Nasdaq 100 rose 1% The Dow Jones Industrial Average rose 0.3% The MSCI World Index rose 0.4% Bloomberg Magnificent 7 Total Return Index rose 0.2% The Russell 2000 Index rose 2.5% Currencies

The Bloomberg Dollar Spot Index rose 0.4% The euro fell 0.2% to $1.1784 The British pound fell 0.6% to $1.3548 The Japanese yen fell 0.7% to 147.96 per dollar Cryptocurrencies

Bitcoin rose 1.6% to $117,487.8 Ether rose 1.9% to $4,590.57 Bonds

The yield on 10-year Treasuries advanced three basis points to 4.11% Germany’s 10-year yield advanced five basis points to 2.73% Britain’s 10-year yield advanced five basis points to 4.68% The yield on 2-year Treasuries advanced two basis points to 3.57% The yield on 30-year Treasuries advanced four basis points to 4.73% Commodities

West Texas Intermediate crude fell 0.6% to $63.68 a barrel Spot gold fell 0.4% to $3,646.69 an ounce –With assistance from Lu Wang.

©2025 Bloomberg L.P.

Popular Stories

Most Discussed

SWI swissinfo.ch - a branch of Swiss Broadcasting Corporation SRG SSR

SWI swissinfo.ch - a branch of Swiss Broadcasting Corporation SRG SSR