Nasdaq Hits Record High, S&P 500 Secures Winning Week as Markets Anticipate Fed Rate Cut
Nasdaq Hits Record High, S&P 500 Secures Winning Week as Markets Anticipate Fed Rate Cut
The Nasdaq Composite concluded a perfect week of closing highs on Friday, September 12, 2025, as investor sentiment solidified around expectations of a Federal Reserve interest rate cut next week. Signs of a weakening jobs market and contained inflation have fueled the belief that the Fed will act to lower its benchmark rate.
The tech-heavy Nasdaq surged 0.44% to settle at a new record of 22,141.10, driven significantly by a jump in Tesla shares. While the broad market S&P 500 remained largely flat, down just 0.05% to 6,584.29, and the blue-chip Dow Jones Industrial Average shed 273.78 points (0.59%) to close at 45,834.22, all three major averages ended the week with gains, following record closes on Thursday.
The S&P 500 marked its best weekly performance since early August, climbing 1.6%, achieving its fifth positive week in six. The Nasdaq secured its second consecutive winning week with a 2% advance, and the Dow posted its first positive week in three, gaining 1% over the period.
Markets are now keenly focused on the Federal Reserve’s decision on September 17, with futures markets pricing in a quarter-percentage-point cut with near certainty, according to the CME FedWatch tool. Economic data released this week, including an unexpected jump in weekly jobless claims to a near four-year high and downward revisions in job growth, strongly support such a move.
Bill Northey, investment director at U.S. Bank Wealth Management, noted that these reports confirm a ‘decelerating labor market’ and that inflation ‘remains well contained,’ setting the stage for next week’s cut. He added that the Fed is unlikely to surprise markets, suggesting they will deliver on the widely expected 25 basis point rate cut. Investors will also seek clarity on the central bank’s economic outlook and monetary policy positioning during the upcoming information-rich meeting.
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