23/09/2025
Markets Steady at Record Highs as Fed Outlook, AI Optimism, and Commodity Swings Shape Sentiment
U.S. equities extended their rally, with major indices hitting new records, though gains remain concentrated in a narrow set of technology leaders. Nvidia was once again in focus after committing $100 billion to support OpenAI’s data center expansion, reinforcing optimism around artificial intelligence. Futures trading was largely flat as investors awaited Micron’s results, where expectations are for strong earnings supported by robust AI-related demand and firmer pricing in memory chips.
In fixed income, Treasury yields eased slightly, with the 10-year at 4.13% and the 2-year at 3.6%, while global bonds gained. The dollar strengthened modestly, and European equities edged higher.
Monetary policy remains the central driver for cross-asset sentiment. Following a 25 basis point rate cut at the last meeting, markets are pricing in a high likelihood of further reductions in October and December. Fed officials have signaled mixed views, with some advocating caution while newly appointed Governor Stephen Miran has pushed for deeper cuts. Chair Jerome Powell’s upcoming remarks are expected to provide further guidance.
On the macroeconomic front, attention is on flash September PMIs, where both manufacturing and services are projected to ease but remain in expansionary territory. On Friday, September 26 at 12:30 PM GMT, the PCE inflation release will serve as the key event. The Richmond Fed Manufacturing Index is also expected to deteriorate further.
Gold extended its historic rally above $3,750 an ounce, supported by expectations of rapid U.S. rate cuts and strong safe-haven demand. The metal is on track for its best monthly performance since March.
Oil prices declined for a fifth straight session, with Brent at $66.46 and WTI at $62.22 per barrel, after Iraq and Kurdish regional authorities reached a preliminary deal to resume crude exports via Turkey. Broader oversupply concerns, coupled with rising output expectations from OPEC+ and non-OPEC producers, added to the pressure.
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