A trader is seen working at the New York Stock Exchange (NYSE) in New York City on September 12, 2025.
On Friday, the Nasdaq Composite reached a notable high amid investors’ optimism over weaker job data and tame inflation, suggesting the Federal Reserve might shift its stance next week.
The tech-heavy Nasdaq finished 0.44% higher at 22,141.10, buoyed by strong performance from Tesla stocks. Meanwhile, the S&P 500 hovered close to a flat line, ending at 6,584.29, slipping just 0.05%. The Dow Jones Industrial Average rose by 273.78 points, or 0.59%, closing at 45,834.22. Each of these indices had closed at record highs the previous Thursday, with the Dow surpassing 46,000 for the first time, marking a positive week across all three major indices.
In fact, the S&P 500 has gained 1.6% this week, marking its fifth favorable week in six and reflecting its best performance since early August. The Nasdaq enjoyed a second consecutive week of gains with a 2% increase, while the Dow saw its first positive week in three, edging up by 1%.
As investors gear up for the Fed’s interest rate decision on September 17th, futures markets seem to anticipate a quarter-point cut. Recent economic data, as indicated by Bill Norsey from U.S. Bank Wealth Management, supports this outlook. Although the consumer price index in August was marginally higher than expected, an unexpected rise in weekly unemployment claims pointed to the highest levels since October 2021.
This combination of data, particularly with downward adjustments in employment growth earlier this week, suggests a slowing job market, with Norsey indicating that inflation could experience “real reductions next week.”
“The Fed is cautious about surprising the market, and I think they’ll lean towards a 25 basis point rate cut,” he remarked.
Norsey further explained that clarity surrounding economic growth and inflation forecasts will be crucial for investors, particularly regarding the Fed’s monetary policy positioning.
“All these aspects contribute to the evolving interest rate landscape,” he said, suggesting that next week’s Fed meeting could provide valuable insights.
