Wall Street climbed to fresh record highs after the Federal Reserve delivered its first interest rate cut in nine months — hinting that more reductions could be on the way.
- VOO ETF has set new all-time highs this week. Check live chart here.
On Thursday, the S&P 500, Nasdaq 100, Dow Jones and small-cap Russell 2000 all closed at all-time highs as investors celebrated the Fed's move.
Fed Rate Cuts
At its September meeting, the central bank lowered rates by 25 basis points to a target range of 4%–4.25%, in line with expectations, as policymakers shifted their focus toward a cooling labor market.
The decision wasn't unanimous: Fed Gov. Stephen Miran — appointed by President Donald Trump to replace Adriana Kugler, who resigned last month — argued for a deeper 50-basis-point cut.
Fed Chair Jerome Powell called the move a "risk management cut," stressing that the Fed acted preemptively to avoid a sharper labor market slowdown. He also played down inflationary pressures from tariffs, describing them as a temporary, one-off factor in the Fed's baseline outlook.
“A reasonable base case is that the [tariff] effects on inflation will be relatively short-lived,” Powell said.
The Fed's updated projections raised both growth and inflation estimates. Yet its rate forecast painted a more aggressive cutting path: two more reductions by the end of 2025, followed by one each in 2026 and 2027.
How Will Rate Cuts Impact Homebuyers?
Rate-sensitive sectors are already showing signs of revival. Mortgage demand spiked ahead of the Fed's decision, with homebuyers rushing to refinance.
In the week ending Sept. 12, total mortgage applications surged 29.7% from the prior week, while refinancing activity jumped 57.7% — the highest level since March 2022, according to the Mortgage Bankers Association.
Intel’s Surge
Intel Corp. (NASDAQ:INTC) was the standout stock of the week. Shares jumped 23% on Thursday after NVIDIA Corp. (NASDAQ:NVDIA) revealed a $5 billion investment in Intel common stock at $23.28 per share, giving it roughly a 5% stake. The investment is part of a broader partnership to co-develop multiple generations of custom chips for data centers and PCs.
Ford Slumps, Auto Recall
Ford Motor Co. (NYSE:F), meanwhile, posted its third straight weekly loss. The automaker recalled 101,944 U.S. vehicles after regulators warned that faulty door trim could detach while driving, posing a crash risk, according to the National Highway Traffic Safety Administration.
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Image created using artificial intelligence via Midjourney.
