United States: Daily Stock Market Performance Insight - September 12, 2025

Today, the stock market was mixed. The Nasdaq Composite climbed 98.03 points, a 0.4% increase, closing at 22,141.10. However, the Dow Jones Industrial Average fell 273.78 points (0.6%) to 45,834.22, and the S&P 500 edged down slightly by 3.18 points (0.1%) to 6,584.29. Despite today’s mixed results, the week was positive overall, with the Nasdaq up 2.0%, the S&P 500 up 1.6%, and the Dow up 1.0%.

Rate Cut Anticipation Drives Market: The biggest story today is the growing expectation of a Federal Reserve rate cut next week. The CME Group’s FedWatch Tool shows a 96.4% probability of a 25 basis point cut. This expectation is fueled by softening economic data – new unemployment claims are at a nearly four-year high, and the University of Michigan’s preliminary September sentiment index dropped to 55.4 from 58.2 in August. This suggests the Fed has room to lower rates to boost the economy.

Economic Data Shows Weakness, But Inflation Remains a Concern: While the labor market is cooling, with the BLS revising down job additions by approximately 911,000 between March 2024 and March 2025, consumers still expect prices to rise 4.8% over the next year and 3.9% over the next five to ten years. This indicates that inflation, while subdued, isn’t completely under control. Investors are pricing in at least three 25-basis-point cuts by the end of the year.

Strong Earnings & IPO Activity: Despite high valuations – the S&P 500’s forward P/E is around 22.5x – earnings growth is supporting stock prices. The “Magnificent 7” are expected to grow earnings by 21% this year, while other S&P 500 companies are projected to grow earnings by 8%. We’re also seeing a surge in IPO activity, with over $4 billion raised this week, the busiest period since 2021, and median listings opening 31% above their offer price. However, $29 billion has been raised year-to-date, still lagging the pre-2020 average of $31.4 billion.

Cash is King (For Now): Interestingly, while stocks have been performing well, investors are still holding a lot of cash. In the past week, cash inflows totaled $266 billion, while US stocks saw outflows of $19 billion. This suggests investors are waiting on the sidelines for more clarity on the Fed’s future actions.