Tuesday, September 16, 2025
Market indexes closed in the red across the board this day, just ahead of a sure rate cut from the Federal Open Market Committee (FOMC). The S&P 500 and Nasdaq struck new intra-day highs early in the session before breaking lower. The Nasdaq looked as if it may eke out a green close, but dipped just ahead of the bell.
The Dow gave back -125 points today, -0.27%, while the S&P 500 was -8 points lower, -0.13%. The Nasdaq was virtually flat: -14 points, -0.07% — snapping a six-day winning streak — while the small-cap Russell 2000 was roughly the same: -0.09%. Bond yields also were down 3 basis points (bps) on 10-year and 2-year treasuries: 4.03% and 3.51%, respectively.
First Fed Cut in 2025 on Deck
After cutting 100 bps of interest rates in the final three months of 2024 — 50 bps in September, 25 in October and December, respectively — the FOMC has not yet moved from the 4.25-4.50% range year to date. Fed Chair Jerome Powell has already asserted, a couple weeks ago at the Jackson Hole Symposium, that the flagging labor market appears to be reason enough to lower rates.
In his 7 1/2 years as Fed Chair, Powell has made a practice of telegraphing the Fed’s moves, whether the market appreciates it or not. Thus, we have no reason to think the Fed won’t cut rates tomorrow; in fact, until recently, it seemed as if 50 bps was on the table for the September 2025 cut, as the Fed provided a year ago. But warmer economic prints — including today’s Retail Sales and Import/Export Prices — is likely to put a damper on a deeper cut.
Will we see more dissent from voting members of the FOMC? We saw two at the last meeting — Fed Governors Chris Waller and Miki Bowman, both who were looking for a 25 bps cut in July. It may stand to reason they raise this to a 50 bps vote. The newest member of the FOMC, Stephen Miran, was just installed by the Republican-led Senate yesterday. Miran has been vocal, as has President Trump, that interest rates are much too high; he may vote for a 50 bps cut or perhaps even higher.
What (Else) to Expect from the Stock Market Tomorrow
We’ll also get a look at August
Housing Starts and
Building Permits numbers ahead of Wednesday’s opening bell. Expectations are for them both to come in at 1.37 million seasonally adjusted, annualized units for last month — but from 1.43 million on Starts and 1.35 million on Permits: different directions.
Finally, while we’re basically between earnings seasons currently (calendar Q3 ends two weeks from today), we’ll see quarterly results from
General Mills GIS and
Cracker Barrel CBRL. Both are expected to bring in negative earnings growth of -20%.
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Cracker Barrel Old Country Store, Inc. (CBRL): Free Stock Analysis Report General Mills, Inc. (GIS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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