During the week of September 8-12, 2025, U.S. equity markets delivered a strong performance, with the S&P 500 rising 1.6% to reach a new record high. The tech-heavy Nasdaq, 2% up, led the rally, also closing at an all-time high, while the Dow Jones finished just below its own record. Treasury bonds yields were 3-7bps tighter, followed by credit spreads 2-10bps tighter. This broad-based strength reflects growing investor confidence as we approach the long-awaited monetary stimulus from the Fed.
Tech and artificial intelligence continue to fuel market enthusiasm. Oracle's stock surged over 35% in a single day following cloud revenue forecasts driven by a deal with Open AI, while Alphabet Google's market capitalization crossed the $3 trillion threshold. This AI-driven momentum continues to reinforce the technology sector's role as a key market leader. Tesla also contributed to the rally, with shares recovering enough to turn positive for 2025.
Looking to the economic data, although consumer inflation in the August CPI data remained high, producer inflation PPI came slightly negative, calming the markets. In the employment side, recent downward revisions to early 2025 payroll job creation data, provided justification for more rate cuts. The return of the easing cycle at the Fed's September meeting this week will be the key driver to support further optimism, with markets paying close attention to the Fed’s statement and Powell’s press release after the decision.
