Market Recap - Thursday, September 18, 2025
Stocks Climb Again, Small Caps Surge to New Record
Stocks continued their winning streak on Thursday, with the S&P 500 and Nasdaq both notching fresh record highs and the Russell 2000 surging 2.5% to break its November 2021 record. The Dow added 0.27%, S&P gained 0.48%, and Nasdaq rose 0.94%, though all closed off their best levels of the day. The upbeat tone was supported by renewed confidence in the Fed’s rate-cutting path, strong economic data, and growing momentum behind the AI trade.
Semiconductors once again led the charge thanks to Nvidia’s $5 billion investment in Intel, which soared over 22%. Other top-performing sectors included software, airlines, machinery, apparel, and even crypto-related stocks. Meme stocks and shorted names also popped. On the flip side, industrial metals, utilities, restaurants, and some consumer staples lagged. Treasury yields rose sharply on the long end, gold slid over 1%, oil dipped 0.7%, and Bitcoin gained nearly 2%. A string of strong data releases — including a huge upside surprise in the Philly Fed manufacturing index and a sharp drop in jobless claims — added fuel to the rally. Meanwhile, tech headlines also helped sentiment, with Apple reportedly boosting iPhone production and Meta unveiling AI-powered smartglasses.
Here’s Our Take
Markets remain in full-on “risk-on” mode, buoyed by a powerful trifecta: a dovish Fed, better-than-expected economic data, and renewed excitement around AI. Investors are shrugging off higher bond yields and leaning into growth sectors, especially small caps, semiconductors, and software names. The Intel-Nvidia partnership has injected new energy into the AI theme and offset earlier concerns about U.S.-China tech tensions.
The sharp drop in jobless claims and the blowout Philly Fed index reading suggest that the economy is still humming along, even as the Fed begins easing. That’s a bullish backdrop — especially for more cyclical and rate-sensitive parts of the market like small caps and autos. That said, there are still some caution flags in sectors like industrial metals and consumer staples, which are showing signs of margin pressure. Overall, though, the path of least resistance for equities remains higher — for now.
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