S&P 500 Holds at Record Amid Calls for a Breather: Markets Wrap

This content was published on September 22, 2025 - 18:00

10 minutes

(Bloomberg) — Wall Street left stocks near a record despite calls for a break after a $15 trillion rally from April lows, with traders awaiting a handful of Federal Reserve speakers and a key inflation measure this week.

After notching 27 all-time highs this year, the S&P 500 saw a small gain on speculation the market has already priced in a range of positive developments such as the restart of Fed rate cuts.

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“Of course, there are reasons to be mindful, given the current high valuations compared to long-term averages,” said Mark Haefele at UBS Global Wealth Management. “After such a strong recent run, a period of consolidation should not come as a surprise, in our view.”

In another sign of subdued appetite for risk, the crypto world got hit as traders saw more than $1.5 billion in bullish wagers liquidated on Monday. Gold powered to a record. Silver also rose, with year-to-date gains topping 50%.

Action was relatively muted in the bond market. Treasuries edged lower ahead of a trio of auctions: $69 billion two-year notes Tuesday, $70 billion five-year notes Wednesday and $44 billion seven-year notes Thursday. The dollar wavered.

At a time when stocks are yet again at all-time highs on the back of a rally in big tech, investors should be “responsibly bullish,” according to Tony Pasquariello at Goldman Sachs Group Inc. He said positioning looks elevated, while the tech rally shows no signs of relenting.

“Do I love the positioning setup and tactical risk/reward? I don’t,” he wrote. “Do I think you should be stepping in front of the US mega cap tech freight train? I don’t.”

On Friday, Goldman Sachs Group Inc.’s chief US equity strategist, David Kostin, boosted his three-month price target for the S&P 500 to 6,800. He also boosted six- and 12-month estimates to 7,000 and 7,200, respectively.

The gauge remained below 6,700 on Monday.

“Our forecast for further equity market upside would be consistent with the historical pattern during rate-cut cycles. During the past 40 years, the S&P 500 has generated a 15% median 12-month return when the Fed resumed cutting rates against a backdrop of continued economic growth,” he noted.

Pockets of exuberance are appearing as equity positioning in the US keeps climbing, Deutsche Bank’s Parag Thatte said, adding that it is not yet close to extremes that would suggest lopsided risks of reversal.

History shows that rallies similar to the one the market has seen this year are difficult to derail: Since 1950, the S&P 500 has advanced by roughly 5.5% on average in the final four months of the year when it has notched at least 20 records by late August, as it did this year, according to Sam Stovall at CFRA Research.

Those gains could come with a few bumps in the road, Stovall said. Still, “while another retreat in stocks may be looming, traders haven’t expended all of the market’s fuel yet,” he said.

Investor focus is likely to shift to the Fed’s tolerance of sticky inflation in 2026, and away from worries about a weaker labor market, according to Morgan Stanley strategists.

“Should the administration’s intention to ‘run it hot’ play out next year while the Fed cuts rates, revenue and earnings growth could come in much stronger than expected,” the team led by Michael Wilson wrote.

There was no sign of seasonal weakness in the first three weeks of September, but with the Fed’s rate cut in the rearview mirror, the market will be searching for fresh sources of momentum, according to Chris Larkin at E*Trade from Morgan Stanley.

“In the short term, if economic data comes in soft, it may need to be in a ‘Goldilocks’ zone — soft enough for the Fed to continue cutting, but not weak enough to fuel recession concerns — for the market to avoid excessive volatility bumps,” he said.

“Stocks have been bucking the historical September weakness so far, thanks to an extremely favorable setup with Federal Reserve rate cuts, strong earnings, solid economic growth and muted inflation, according to Rick Gardner at RGA Investments.

“The stock market’s strength is making it tougher to put new money to work, as valuations are rising, which makes it all the more important for investors to be selective and bottoms up,” he said.

The Fed’s preferred gauge of underlying inflation likely grew at a slower pace last month, offering policymakers some breathing room to address weakness in the US labor market.

A report on Friday is forecast to show the personal consumption expenditures price index excluding food and energy rose 0.2% in August, compared with 0.3% in July. On an annual basis, the so-called core measure is seen holding at a still-elevated 2.9%.

Several Fed officials are set to speak at public events in the coming week, including Chair Jerome Powell on Tuesday. New Fed Governor Stephen Miran — on a temporary leave from his role as chair of the White House Council of Economic Advisers — as well as Michelle Bowman and Mary Daly are scheduled to offer their thoughts.

Fed Bank of St. Louis President Alberto Musalem said he supported last week’s interest-rate reduction as a way to take out insurance against a weakening labor market, but sees limited room for more cuts amid elevated inflation.

Musalem said interest rates are now “between modestly restrictive and neutral.” He said he would support further reductions if the labor market worsens further, but emphasized the importance of keeping long-run inflation expectations stable.

“Fedspeak this week will highlight the wide dispersion of views on the Committee,” said Oscar Munoz at TD Securities. “We do not expect Powell to change his tone from his FOMC press conference.”

Corporate Highlights:

Oracle Corp. would recreate and provide security for a new US version of TikTok’s algorithm under a deal taking shape to sell the popular Chinese-owned app to a consortium of American investors, a White House official said, addressing a key concern raised by lawmakers in Washington. Oracle on Monday promoted two executives, Clay Magouyrk and Mike Sicilia, to the joint role of chief executive officer. Safra Catz, who has led the company since 2014, will become the executive vice chair of the board. ASML Holding NV’s recent rally got a fresh boost on Monday as Morgan Stanley joined the ranks of the stock’s bulls, signaling that the chip-equipment maker may at last show a major uplift from artificial intelligence demand. Kenvue Inc. slipped as Trump administration officials plan to link the active ingredient in Tylenol to autism on Monday, the Washington Post reported, citing unnamed people familiar with the matter. Pfizer Inc. will pay $4.9 billion for the obesity startup Metsera Inc. in a bid to catch up to rival drugmakers after failing to compete with its own weight-loss medications. T-Mobile US Inc. will elevate its chief operating officer, Srini Gopalan, to the chief executive officer spot on Nov. 1, replacing Mike Sievert, who has held the job for nearly six years. MetLife Inc. expects third-period income from its private equity and real estate investments to meet its quarterly target for the first time this year, according to a filing Monday. Compass Inc. agreed to buy Anywhere Real Estate Inc. in a deal that would create a combined company with a roughly $10 billion enterprise value, cementing Compass’s status as the largest residential brokerage in the US. ODP Corp., owner of the Office Depot retail chain, is being acquired by private equity firm Atlas Holdings for about $1 billion. Newly-formed Strive Inc. agreed to acquire Semler Scientific Inc. in a deal that combines two publicly-traded Bitcoin treasury companies. Porsche AG shares fell the most on record after the luxury-car maker scaled back its electric-vehicle plans, correcting an expensive strategy that’s depressed its margins and is dragging down parent Volkswagen AG. Roche Holding AG’s experimental drug giredestrant helped patients with a form of advanced breast cancer live longer without the disease worsening in an advanced trial. BBVA SA raised the value of its takeover bid for Banco Sabadell SA by about 10%, a last-ditch effort to get a deal over the line that’s been delayed by regulatory reviews and government opposition for more than a year. Samsung Electronics Co. jumped after reports it’s won approval from Nvidia Corp. for the use of advanced memory chips, which marks a breakthrough for the Korean technology leader. BYD Co. sank after a report that Warren Buffett’s investment firm offloaded its stake in the Chinese electric-vehicle maker. What Bloomberg Strategists say…

“The balance of risks heading into a big week filled with Federal Reserve speakers tilts toward pricing for additional interest-rate cuts — a scenario that will put a floor under stocks.”

—Kristine Aquino, Managing Editor, Markets Live. For the full analysis, click here.

Some of the main moves in markets:

Stocks

The S&P 500 rose 0.1% as of 12 p.m. New York time The Nasdaq 100 rose 0.2% The Dow Jones Industrial Average was little changed The Stoxx Europe 600 fell 0.1% The MSCI World Index rose 0.1% Bloomberg Magnificent 7 Total Return Index rose 0.8% The Russell 2000 Index was little changed Currencies

The Bloomberg Dollar Spot Index was little changed The euro rose 0.2% to $1.1771 The British pound rose 0.2% to $1.3500 The Japanese yen was little changed at 147.84 per dollar Cryptocurrencies

Bitcoin fell 2.2% to $112,837.89 Ether fell 6.9% to $4,168.12 Bonds

The yield on 10-year Treasuries advanced two basis points to 4.14% Germany’s 10-year yield was little changed at 2.75% Britain’s 10-year yield was little changed at 4.71% The yield on 2-year Treasuries advanced two basis points to 3.59% The yield on 30-year Treasuries advanced three basis points to 4.77% Commodities