Stocks Inch Higher as Fed Meeting Comes Into Focus

Published as of: September 15, 2025, 9:13 a.m. ET

(Monday market open) Stocks are ticking modestly higher to begin the week, as hopes remain elevated for an interest-rate cut. Economic calendars are light today, apart from the Empire State Manufacturing Survey, due at the open. The tech sector is in the black, as continued strength in Tesla (TSLA) offsets a slide in Nvidia (NVDA). 
     
Looking ahead to Wednesday afternoon's rate decision and projections from the Federal Open Market Committee (FOMC), odds lean toward a 25-basis point rate cut despite stubborn inflation prints. Two additional 25-basis point trims are likely by year-end, according to the CME FedWatch Tool. Although Trump told reporters Sunday he predicts a "big cut," odds of a 50-basis point rate cut Wednesday are just 3.8%, likely hindered by last week's sticky consumer price reading even as recent job data remained soft.

Friday was mixed, with the tech-heavy Nasdaq Composite closing at a new peak but the S&P 500 index ending down after an intraday record high. Last week, the S&P 500 gained 1.6% and the Nasdaq jumped 2%. "Markets have continued in 'melt up' mode, which appears driven by the backdrop of a massive AI investment cycle coupled with the prospect of a Fed easing cycle," said Nathan Peterson, director of derivatives analysis at the Schwab Center for Financial Research, in his Weekly Trader's Outlook. "Although valuations are historically high and uncertainty around tariffs and inflation persist, 'don’t fight the Fed' appears to dominate investor sentiment for the time being."

1. Economic insights from consumer spending data: Retail sales data due before tomorrow's open will offer the latest take on the resilience of American consumers in the face of a deteriorating labor market and the tariff regime. Looking past the headline number, investors will scrutinize sales of tariff-sensitive goods such as furniture, clothing, and electronics, as well as spending at restaurants and bars. Weak results could raise recession fears, while unexpectedly strong numbers could heighten concerns about reigniting inflation. Retail sales held up well in July, rising 0.5% from the previous month, helped by strong auto sales, but core sales rose only 0.3%. Economists forecast that overall sales rose 0.3% in August. As always, investors might want to closely watch the "control group" retail sales data, which excludes volatile sales metrics from auto dealers, building materials stores, and gas stations. Knowing the gap between headline retail sales and this number can give investors a better sense of how the government sees economic growth trending.
    
2. Tariffs have consumers expecting higher inflation: Tariffs are weighing on consumers, who expect inflation to be stickier than they did at any time during the post-Covid inflation spike. Consumers now see 3.9% inflation over the next five years, according to the University of Michigan consumer sentiment survey released Friday. That's down from a peak of 4.4% in April, immediately after the announcement of widespread tariffs, but still higher than at any time during the 2021–2023 inflation surge. Consumers now expect 4.8% inflation over the next year, compared with a 10-year average of 3.3%. Of course, they're also coping with a worsening job market—another reason the headline sentiment index fell to 55.4 in September, below economists' expectations. But survey researchers noted that 60% of respondents they interviewed mentioned tariffs unprompted, saying "trade policy remains highly salient."
    
3. Bitcoin breaks resistance, faces competition: Bitcoin broke above its 50-day moving average just above $115,000 on Friday, adding to several days of gains, and finishing the week up 3.5%. But another cryptocurrency, ether, outpaced bitcoin with a 4% gain. Meanwhile, Gemini Space Station (GEMI), a cryptocurrency exchange company, surged 14% Friday on its initial public offering (IPO) resulting in a late-day boost to the crypto market. It continued to surge premarket Monday. "Relative strength in ether reinforced the 'altcoin' narrative," said Jim Ferraioli, cryptocurrency strategist at Schwab. "Historically, late in the bitcoin cycle, investors have looked for opportunities outside of bitcoin. This is referred to as 'alt-season' within the crypto community. While bitcoin's breakout above the 50-day moving average is encouraging, September is seasonally a weak month for bitcoin. However, seasonal weakness could get overlooked given the potential for a larger rate-cutting cycle, assuming rate cuts don't lead to a risk-off market."

• TSLA climbed another 7% Friday as its rally continued. The rally is continuing in pre-market trading with the shares up over 8% following CEO Elon Musk's announcement that he bought about $1 billion worth of the stock on Friday—his first open-market TSLA purchase since early 2020.
   
• Deutsche Bank upgraded Micron (MU), giving the chipmaker a boost ahead of earnings next week. The shares are up roughly 1% ahead of the bell.  
   
• Union Pacific (UNP) is higher after Citi upgraded the stock to "buy" from "neutral" and boosted its price target.
   
• Pfizer (PFE) and Moderna (MRNA) plummeted 4% and 7%, respectively, on Friday after a Washington Post report indicated the Trump administration plans to link COVID vaccines to the deaths of 25 children.
   
• Furniture retailer RH (RH) slumped 4.82% on Friday after missing Wall Street's earnings estimates and issuing weak full-year guidance due to rising tariff-related costs. RH CEO Gary Friedman unnerved investors on the company's quarterly earnings call Thursday afternoon. The CEO warned furniture retailers would be forced to offer significant discounts to boost sales due to a weak housing market and accelerating inflation.
   
• Oracle (ORCL), which skyrocketed earlier last week on its surprisingly positive guidance, fell more than 5% Friday. It still finished the week up more than 32%.
   
• Warner Bros. Discovery (WBD) rose another 16.7% Friday after its double-digit rally Thursday. The Wall Street Journal reported that Paramount Skydance (PSKY) is preparing a takeover bid backed by the Ellison family.
   
• Several tech companies supported the Nasdaq Composite Friday, including Palantir (PLTR), Super Micro Computer (SMCI), AppLovin (APP), and Advanced Micro Devices (AMD).
   
• The week also featured a solid finish for the Magnificent Seven, with TSLA leading the pack. Apple (AAPL), Microsoft (MSFT), Meta Platforms (META), NVDA, and Alphabet (GOOGL) also gained. The mega-cap rally could reflect optimism ahead of earnings season, with analysts predicting another round of solid quarterly results.
   
• While Nvidia posting a positive week after four weeks of losing ground, it was down early Monday almost 2% after China's market regulator said the company violated Chinese anti-monopoly laws when it acquired Israeli tech company Mellanox.
   
• Only four of 11 S&P 500 sectors rose Friday, led by an odd mix of defensive and cyclically sensitive sectors. Meanwhile, "the S&P 500's relative strength index (RSI) is signaling slowing momentum, which may suggest that future potential gains may be harder to come by than the rally that got us here," my colleague Nathan Peterson said. Small caps had a rough session as Treasury yields jumped ahead of the Fed meeting. The S&P 500 index is up 3.8% since July 31.

In a more granular illustration of market breadth, it's clear that consumer and utilities stocks are leading from a position of longer-term strength—with the highest percentage of members trading about their 200-day moving averages. From a shorter-term perspective, the story is similar. Among consumer discretionary stocks, 78% were above their 50-day trendline as of September 11. This compares to just 57% of information technology stocks and 46% of Nasdaq-100^® (NDX) members. And 61% of NDX members traded above their 200-day moving averages. Overall, in the S&P 500, 65% of stocks are trading above their 50-day and 69% above their 200-day.