Both the S&P 500 ETF (SPY) and the NASDAQ 100 ETF (QQQ) wrapped up Monday’s trading on a positive note, as the market prepares for the Federal Open Market Committee (FOMC) meeting scheduled for September 16-17.
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The U.S. and China recently completed the second day of in-person trade discussions in Madrid, Spain. President Trump shared on social media that the talks have gone “very well.” He mentioned he would also speak with Chinese President Xi Jinping on Friday. Treasury Secretary Scott Bescent later revealed that before the app ban on September 17, both parties reached an agreement regarding TikTok and hinted at a possible 90-day extension on the tariff suspension.
However, Trump stirred some concern on Wall Street by suggesting that U.S. public companies should report their earnings twice a year to help management save on costs and operate more effectively.
“Have you heard about how China takes a 50-100 year approach when managing its companies, while we focus on quarterly results? Not ideal!” Trump stated on his Social Post of Truth. Any significant changes proposed would need approval from the Securities and Exchange Commission (SEC), led by Paul Atkins, who Trump appointed.
TD Cowen analyst Jaret Seiberg pointed out that it could take at least six months for the SEC to assign a 60% chance of approving this measure. Other analysts expressed their worries, emphasizing increased uncertainty and volatility, which might also cut down on transparency.
Looking ahead, the Fed is predicted to implement a rate cut with a 96% likelihood of a 25 basis points reduction, according to CME’s FedWatch tool. However, Standard Chartered anticipates that central banks might escalate this to a 50 basis points cut, given the weakening labor market. The unemployment rate rose to 4.3% from 4.2% in August, and the Bureau of Labor Statistics (BLS) revised its non-farm payroll total for the year ending in March to a staggering 911,000 jobs.
“August labor market indicators, akin to what we observed last year, could pave the way for a 50 basis points rate reduction at the upcoming FOMC meeting in September,” the bank remarked. Yet, the chances for this 50 basis point cut stand at just 4%.
The S&P 500 (SPX) finished the day with a gain of 0.47%, while the Nasdaq 100 (NDX) rose by 0.84%.
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