Review & Preview: All News Leads to a Rate Cut

Sep 11, 2025 19:50:00 -0400 by Sabrina Escobar | #Markets #Review & Preview

Manifesting a Rate Cut. Major stock indexes notched more records on Thursday after economic data all but confirmed investors will get the interest-rate cut they’ve been waiting for.

The Dow Jones Industrial Average crossed 46,000 for the first time ever, gaining 1.4% on the day and marking its fourth record close of the year. It had been 191 trading days since the index’s last 1,000-point milestone, according to Dow Jones Market Data. Within that time, Goldman Sachs, Microsoft, and JPMorgan Chase have added the most points to the index; UnitedHealth Group, Salesforce, and Sherwin-Williams have been the laggards.

The S&P 500 and Nasdaq Composite were up 0.9% and 0.7%, respectively. They each clinched their 24th record closes of 2025.

Under normal circumstances, the August reading of the consumer price index would have been the biggest news of the day. Headline inflation rose at a 2.9% annual rate, higher than July’s 2.7% rate but in line with expectations.

Markets took the data in stride. Yes, inflation is rising as tariffs work their way through the economy, but the acceleration is gradual and long-term inflation expectations remain well-anchored, reducing the risks of a steep inflation spiral. Most important, the numbers keep the Federal Reserve on track to deliver a rate cut at next week’s policy meeting.

The rate hopes were even buoyed by a big increase in weekly jobless claims data, which saw the number of Americans filing for unemployment hit the highest level since October 2021.

Economists caution against reading too much into the jobless claims report. For one, it’s just one week of data—and a holiday week, at that, which tends to be more volatile. Plus, the rise in claims was mostly tied to an increase in Texas, meaning the trend hasn’t become widespread yet.

Still, the report provoked “a new pang of anxiety” over the state of the labor market, wrote Bill Adams, chief economist for Comerica Bank:

After the downward revisions to payrolls announced earlier this week and the weak jobs report for August last week, the job market is looking the wobbliest since the pandemic. With inflation moving higher and the job market softening, the Fed is in a pickle. Chair Powell stated in his August speech at the Jackson Hole monetary policy conference that “the stability of the unemployment rate and other labor market measures allows [the Fed] to proceed carefully as we consider changes to our policy stance.” After the latest data, the jobs market looks weaker than when Powell made that statement.

All that to say, investors are banking on getting several rate cuts this fall—with continued stock market gains to follow.

Company

Last

Chg

Chg%

Dow Jones Industrial Average

45,834.22

-273.78

-0.59%

S&P 500 Index

6,584.29

-3.18

-0.05%

NASDAQ Composite Index

22,141.10

98.03

0.44%

Market Data as of

The Hot Stock: Warner Bros. Discovery +29.0%
The Biggest Loser: Oracle -6.2%

Best Sector: Materials +2.1%
Worst Sector: Energy +0.02%

Created with Highcharts 9.0.1Thursday, Sept. 11Index performanceSource: FactSet

Created with Highcharts 9.0.1Sept. 1100.20.40.60.81.01.21.41.6%Dow industrialsS&P 500Nasdaq Composite

IPO-Mania Is Back

The initial public offering market has staged a remarkable recovery this summer, with buzzy IPOs like Figure Technology Solutions, Klarna, Circle Internet Group, Figma, Bullish, Miami International, and Heartflow seeing double-digit share gains on their first trading days.

But investors should be careful about buying into the hype. Many of these stocks gave back some of their first-day trading gains in the weeks after they began trading, raising the question: Should the market be worried about the IPO boom turning into a bust?

There are some “eerie parallels” between today’s IPO market and the doc-com bubble of the late 1990s, writes my colleague Paul La Monica. The Nasdaq is once again at a record high, and many of the companies that are debuting have yet to consistently turn a profit. Paul includes this key quote in his story:

“Look at the volatility and see how these IPOs come out. They often hit a high on the first day and then pull back. That tells me that investors still should be careful,” said Reena Aggarwal, director of the Georgetown University Psaros Center for financial markets and policy.

Aggarwal said she’s worried about froth in the IPO market, and that it pays to be patient and not try to buy on the first day. Investors will likely get a better sense of the true value of a company after it reports earnings in the coming months.

But after a monthslong dearth of high quality IPOs, investors aren’t in the mood to wait. Figure Technology opened 44% above its offering price Thursday and closed 25% higher by the end of the session. Klarna shares popped as much as 30% at Wednesday’s opening, but pared back their gains throughout the day, closing 15% higher. The stock fell 6.7% on Thursday.

That isn’t necessarily a bad thing, write my colleagues, Elsa Ohlen and Mackenzie Tatananni:

While Klarna’s outcome might seem a little more muted, it’s actually the ideal scenario for a company, said Phil Haslett, Chief Strategy Officer at Equityzen. “A modest uplift on day one signals the offering was priced correctly and that there’s genuine excitement for the business—just not the same level of frenzy we saw with names like Circle, CoreWeave, or Figma.”

Klarna was founded in 2005 as a buy now, pay later service provider, but has since expanded its business into other financial services, such as credit and debit cards. Although the company was founded in Sweden and has a strong European business, the U.S. is one of Klarna’s largest and fastest-growing markets.

“There’s a credibility that unquestionably comes with doing this,” Klarna’s Chief Commercial Officer David Sykes told Mackenzie in an interview ahead of the stock’s first trading day. “This is a signal to our customers, merchant partners, you name it, that we’re sort of the real deal.”

The Calendar

The University of Michigan releases its Consumer Sentiment survey for September tomorrow. Economists forecast a 58.1 reading, slightly lower than Augusts’ final 58.2 reading and well below historical levels. Consumer expectations of the year ahead inflation was 4.8% in the August survey.

What We’re Reading Today

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