Market Recap - Thursday, September 11, 2025
Stocks Rally as Rate Cut Bets Firm Despite Hotter CPI
Stocks rebounded sharply today, with the Dow gaining 1.36%, the S&P 500 up 0.85%, the Nasdaq rising 0.72%, and the Russell 2000 jumping 1.83% — leaving it less than 1% from its 2021 record high. The rally was broad-based, led by healthcare services, homebuilders, China tech, cruise lines, industrial metals, and banks. Even retail favorites and speculative names caught a bid. Tesla stood out among big tech, while energy, airlines, software, regional banks, and dollar stores lagged. The Treasury curve flattened slightly, with long-end yields down around 4bps. The dollar softened, gold slipped 0.2%, and oil dropped 2% to its lowest in two weeks.
Market momentum was fueled by economic data that, despite showing a hotter-than-expected headline CPI print (+0.4% m/m), didn't derail expectations for a September rate cut. Core CPI rose 0.3%, in line with estimates, and jobless claims unexpectedly spiked to a four-year high at 263K — strengthening the case that labor market softness will keep the Fed on track to ease. Treasury auctions continued to show strong foreign demand, easing concerns about sovereign debt supply. AI remained in focus with reports the FTC is probing chatbot providers, and Alibaba/Baidu shifting away from Nvidia chips. Meanwhile, a flurry of corporate news added to the excitement — highlighted by a massive 80% jump in Opendoor after announcing a new CEO, a reported Warner Bros. buyout bid, and solid IPO market activity.
Here’s Our Take:
Today’s strong market performance reflects a classic “bad news is good news” setup. The CPI report, while slightly hotter on the surface, was offset by signs of softening in the labor market — most notably the spike in jobless claims. That dynamic has reinforced market bets on Fed rate cuts, with futures now pricing in ~70 bps of easing by year-end. At the same time, investor anxiety around long-term bond supply and global rate volatility has eased thanks to this week’s strong Treasury auctions and falling yields across developed markets.
Beneath the surface, AI and M&A stories are helping keep risk appetite alive, even as valuations remain stretched and geopolitical noise lingers. The rally in small caps, profitless tech, and heavily shorted names suggests some speculative froth is re-emerging, but the leadership from healthcare, banks, and semis shows there’s still fundamental support under the surface. With no Fed commentary until next week’s FOMC decision, attention now shifts to Friday’s consumer sentiment report and inflation expectations data to close out the week.
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