Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Investors Business Daily
Investors Business Daily
Business
IBD STAFF

Stock Market Rallies To New Highs On Fed Rate Cut, Nvidia News; Tesla Jumps: Weekly Review

The stock market surged to record highs on a Fed rate cut, an Nvidia-Intel partnership and more. The major indexes all hit new peaks and so did the small-cap Russell 2000. Many chip stocks jumped while quantum plays soared in a big week for a lot of speculative names. Tesla extended a big breakout as CEO Elon Musk bought up shares.

The Federal Reserve cut rates by a quarter point on Wednesday as expected, leaving the door open for more at future meetings.

Stock Market Rallies To New Highs

The stock market initially was mixed on the Federal Reserve's quarter-point cut, but ultimately powered higher. The Dow Jones, S&P 500 Nasdaq and small-cap Russell 200 all hit record highs. Chip stocks were big winners as Nvidia bought an Intel stake. Quantum computing and other speculative growth stocks were hot as well. The 10-year Treasury yield rebounded following the Fed rate cut after briefly undercutting 4%.

Fed Just Clears Wall Street Bar

As expected, the Federal Reserve cut its key rate a quarter-point and signaling another half-point in rate cuts over the year's final two meetings. However, Fed Chairman Jerome Powell noted that "dot plot" projections showed policymakers were closely divided: Nine penciled in just one more quarter-point move this year, while 10 saw at least another 50 basis points in rate cuts as appropriate. Despite a softer labor market, Powell painted a bright picture for the economy. The Fed now expects GDP growth of 1.8% next year, up from 1.6% in June projections. Inflation fears are abating, though there's no all-clear signal yet. Meanwhile, retail sales grew a stronger-than-expected 0.6% in August, easing concerns about a job-led slowdown.

Futures: Time To Take Profits In These Red-Hot Stocks?

Nvidia Has Up-Down Week

AI-chip leader Nvidia saw its shares seesaw in the past week. First, shares fell after Chinese regulators accused Nvidia of failing to meet certain conditions imposed when they approved Nvidia's Mellanox buy in 2020. They fell further on a report that Beijing barred Big Tech firms from buying Nvidia's lower-powered AI chips designed for China. But Nvidia rebounded after announced a collaboration with Intel to develop custom data center and PC products. Nvidia will invest $5 billion in Intel stock. Intel stock skyrocketed, with many other chip names jumping, though a handful of names slashed weekly gains.

Tesla Races As Elon Musk Discloses TSLA Buy

Tesla extended a breakout, rising sharply to an eight-month high. CEO Elon Musk on Monday disclosed that he bought $1 billion in TSLA stock on Sept. 12, his first open market buy since February 2020. Musk said that he's "burning the midnight oil," working on Optimus, an upcoming AI5 chip and more. Meanwhile, the EV giant settled two court cases involving fatal Autopilot crashes following the Aug. 1 jury ruling against Tesla. Also, Tesla said it will look into redesigning door handles following more reports of passengers being traded inside.

Quantum Leap

Quantum computing stocks had massive weekly gains with IonQ, Rigetti Computing and D-Wave Quantum surging to a record high. D-Wave hosted a user conference in Tokyo called Qubits Japan 2025. The Department of Energy will partner with IonQ, Honeywell and the Electric Power Board of Chattanooga to develop. Also, IonQ closed the $1 billion acquisition of Oxford Ionics and announced the purchase of Vector Atomic, a startup in advanced quantum sensors for positioning, navigation and timing (PNT) applications. Rigetti won a three-year, $5.8 million contract from the Air Force Research Laboratory (AFRL) to advance superconducting quantum networking. Meanwhile, the Quantum World Congress, an annual conference, is taking place in Tysons, Va., with many quantum companies participating.

CrowdStrike Guides Up, Netskope Debuts

CrowdStrike said that net new annual recurring revenue will rise 20% or more in fiscal 2027 starting next February, as the cybersecurity giant continues to rebound from a 2025 global IT outage last year. ARR is a key financial metric tied to subscription services growth. CrowdStrike reiterated that net new ARR growth will reaccelerate to 40% or more in the second half of fiscal 2026. Meanwhile, Netskope jumped 18% in Thursday's Nasdaq debut after pricing its IPO at 19 a share, above the expected range. Netskope operates a cloud-based Secure Access Service Edge, or SASE, platform that supports remote workers and branch offices.

Lennar Earnings Tumble

The homebuilder's Q3 earnings dived 46%, though that beat views, while revenue missed with a 6.6% drop to $8.81 billion, with heavier incentives needed. Lennar expressed optimism that lower interest rates will revive housing demand, with new orders rising in Q3. But its Q4 home delivery guidance was low. Shares fell solidly, extending a pullback after a strong housing rally.

FedEx Beats Amid Trade Headwinds

The global shipping giant reported a 6% EPS gain, while revenue climbed 3% to $22.2 billion, both beating fiscal Q1 views. FedEx noted that the spinoff of its freight business into a public company is still on track and expected to be completed by June 2026. The company forecasts 2026 earnings between $17.20 and $19 per share adjusted, after accounting adjustments and excluding business optimization costs, on 4% to 6% revenue growth. FedEx predicts it will generate $1 billion in permanent cost reductions as part of its transformation initiative, with $4.5 billion in capital spending on network optimization and fleet and facility modernization and optimization. But CFO John Dietrich said he expects a $1 billion headwind in 2026 due to the global trade environment. Analysts had mixed reactions. Shares rose modestly.

Meta Connect Puts Lens On Glasses

CEO Mark Zuckerberg unveiled the latest Meta Platforms smart glasses at the tech giant's Connect conference. The Ray Ban Display glasses feature a small screen that projects messages, video calls and apps into their viewer's field of vision through holograms. The $799 glasses are equipped with Meta's voice activated AI assistant. Meta is pledging to invest hundreds of billions into developing the AI concept of superintelligence. Zuckerberg expects smart glasses will be a popular way for users to interact with AI. "Our goal is to build great-looking glasses that deliver personal superintelligence and a feeling of presence using realistic holograms," Zuckerberg said at his keynote. Wall Street analysts were impressed with the product but generally expect mainstream adoption of smart glasses is still years away. Meta stock rose modestly for the week amid broad market strength.

Darden Restaurants Falls On Miss

The parent of Olive Garden and LongHorn Steakhouse reported a 13% EPS gain, slightly missing fiscal Q1 views. Revenue matched estimates on 10% growth to $3.04 billion. Same-restaurant sales climbed 4.7%, with 22 net new locations and the acquisition of 103 Chuy's Tex-Mex restaurants also lifting sales. CFO Rajesh Vennam said Darden Restaurants is seeing higher prices on seafood, primarily due to tariffs on shrimp, while beef costs have experienced a "significant spike." Darden did slightly lift its full-year sales target while holding EPS goals steady. Shares tumbled to a five-month low.

Stock Market News In Brief

Hims & Hers Health tumbled Tuesday after the FDA issued a warning letter regarding its compounded version of semaglutide. The agency claims Hims' website misbrands its product and notes compounded drugs are not FDA approved. Hims now has 15 days to respond. Semaglutide is the active ingredient behind diabetes and obesity drugs Ozempic and Wegovy, made by Novo Nordisk.

Novo Nordisk jumped Thursday after reporting its oral Wegovy helped patients lose an average 16.6% of their body weight over the course of 64 weeks. That topped the 2.7% weight loss for placebo recipients. More than a third of patients who received the semaglutide pill lost at least 20% of their body weight.

Google-parent Alphabet topped a $3 trillion market cap for the first time, extending a strong rally. In the latest week, Google stock rose on news that Gemini became the No. 1 free app in the U.S. Apple Store, overtaking OpenAI's ChatGPT and Perplexity.

Apple rose on early indications of solid sales for its iPhone 17 series smartphones. Preorders for the new handsets began on Friday Sept. 12, with in-store availability a week later. Demand for premium Pro models was particularly strong, analysts said.

Trump administration officials said they have a framework to allow the sale of TikTok's U.S. operations. While there are no official details yet, reports point to an investor group that includes Oracle taking control of the American version of the hit short-video app. A 2024 law bans TikTok unless it is sold by Chinese parent company ByteDance, though Trump hasn't applied the law.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.