Closing Recap

U.S. stocks surged to fresh all-time highs, led by a powerful rally in technology and small caps, as investors celebrated the Federal Reserve’s dovish stance and signs of a resilient U.S. economy; the dollar was mixed, Treasury yields climbed, while oil and gold prices pulled back. In the currency markets, the U.S. dollar saw mixed action, with the GBP/USD pair tumbling after the Bank of England held rates steady, while the Japanese Yen strengthened as two BOJ members unexpectedly dissented in favor of a rate hike. 

Key Takeaways 

• New Record Highs: The S&P 500, Nasdaq, and Russell 2000 all closed at new all-time highs, driven by strong post-FOMC optimism. 
• Dovish Fed Fuels Rally: Markets continued to cheer the Fed’s 25-basis-point rate cut on Wednesday and its forecast for two more cuts this year, fueling a “risk-on” mood. 
• Tech & Small Caps Lead: Technology, particularly semiconductors, was a standout performer, and the Russell 2000’s surge to a new record indicated a healthy broadening of the rally. 
• Economic Data Supports Soft Landing: A drop in jobless claims and a strong Philly Fed survey suggested the economy remains solid, supporting the “soft landing” narrative. 
• Major Currencies Under Pressure: The firm dollar pushed EUR/USD below the key 1.1800 level, while GBP/USD tumbled after the BoE decision. In contrast, USD/JPY dropped sharply on the BoJ news (Japanese Yen gained after two BOJ members dissented in favor of a rate hike). 
• Bitcoin Pushes to 1-Month Highs: Bitcoin prices climbed above $117,000 as risk appetite improved, though some analysts are warning of a potential deep correction in the future. 
• Oil & Gold Slip: Crude oil and gold prices both declined on profit-taking and perhaps a slight reduction in immediate safe-haven demand. 
• Yields Rise: Treasury yields moved higher as investors rotated out of safe-haven bonds and into equities. 

Market Overview

The party raged on Wall Street today, with U.S. equity markets extending their powerful rally to new all-time highs for the S&P 500, Nasdaq Composite, and, notably, the small-cap Russell 2000 index. The optimism was a direct continuation of the market’s positive reaction to the Federal Reserve’s 25-basis-point rate cut and dovish forward guidance delivered yesterday. The Fed’s forecast for an additional 50 basis points of cuts this year has effectively given a green light to investors, who are now fully embracing a “risk-on” stance. 

Index	Up/Down	% Change	Last
DJ Industrials	123.92	0.0027	46142
S&P 500	31.6	0.0048	6631
Nasdaq	209.4	0.0094	22470
Russell 2000	60.35	0.0251	2467

Yesterday’s gains were broad and significant. The rally was once again led by the technology sector, with semiconductors surging for the 10th time in 11 days, fueled by strong earnings from companies like CrowdStrike (CRWD) and ongoing momentum in the AI space. The surge in the Russell 2000 to a new record is particularly encouraging, as it signals a broadening of market participation beyond just the mega-cap tech names and suggests investors are confident in the health of the domestic U.S. economy. 

Economic data released yesterday was also supportive. Weekly jobless claims fell more than expected, and the Philadelphia Fed business conditions survey for September surged, blowing past expectations with strong new orders and employment components. This combination of a dovish Fed and resilient economic data is creating a “Goldilocks” environment for stocks. In central bank news, the Bank of England held interest rates steady as expected, while the Bank of Japan also kept its policy unchanged, though two members surprisingly dissented in favor of a rate hike, a hawkish twist that strengthened the Yen.

Economic Calendar

U.S. economic data today was mostly stronger than expected, particularly the Philly Fed survey, adding to the market’s positive tone. Yesterday’s Calendar: 

• Weekly Jobless Claims: Fell to 231,000 (from a revised 264,000), better than the 240,000 consensus. 
• Philadelphia Fed Business Conditions (Sep): Surged to 23.2 (vs. +2.5 est., -0.3 prior). New Orders 12.4. Prices Paid tumbled to 46.8. 
• Leading Index (Aug): Fell -0.5% (vs. 0.0% est.). 
• Bank of England (BoE): Held rates unchanged at 4.00%.

Key Central Bank Decisions Today and Data: 

• Bank of Japan (BoJ): Held rates unchanged at 0.50%, with two dissents for a hike. 
• UK Retail Sales (Aug): Rose 0.5% MoM (vs. 0.3% exp), but the annual pace slowed to 0.7% YoY.

With the major central bank decisions of the week now past, the focus shifts to second-tier data and ongoing risk sentiment. 

• 06:00 GMT – German Producer Price Index (PPI) (Aug) 
• Ongoing – Market digests BoJ decision and monitors US-China trade rhetoric.

Commodities, Treasuries and Currencies 

Gold prices took a breather after a strong run, with the December futures contract slipping $39.50 (-1.06%) to settle at $3,678.30 per ounce. The pullback was likely due to profit-taking and a slight reduction in safe-haven demand as equities surged. Crude oil prices also erased earlier gains to finish lower, with WTI down $0.48 (-0.75%) to settle at $63.57/bbl. Natural gas prices continued their slide. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-0.48	USD/bbl	63.57
Brent	-0.51	USD/bbl	67.44
Gold	-39.5	USD/oz	3678.3
EUR/USD	-0.0026	USD	1.1786
USD/JPY	0.9	JPY	147.87
10-Year Note	0.03	%	0.04106

In the currency markets, the U.S. dollar was mixed but generally well-bid against currencies whose central banks are perceived as more dovish. The GBP/USD pair tumbled over 0.5% after the Bank of England held rates steady, with the Pound falling back around the big psychological 1.3500 level. Elsewhere, UK retail sales data for August came in stronger than expected on a monthly basis but showed a cooling trend year-on-year, adding pressure to the British Pound.

The Japanese Yen, however, strengthened significantly after two BOJ members dissented in favor of a rate hike, a hawkish surprise that sent USD/JPY below 147.50. The EUR/USD pair was steady ahead of key German PPI data tomorrow, with large options expiries likely containing price action. U.S. Treasury yields crept higher as investors rotated out of safe-haven bonds and into riskier assets. The 10-year yield rose about 3 basis points to 4.106%. 

The digital asset space continued to show impressive strength. Bitcoin pushed to a one-month high above $117,500, with traders now setting their sights on the $120,000 psychological level. The move lifted related crypto stocks and was part of a broader risk-on mood.

Looking Ahead 

The market heads into Friday with significant positive momentum and multiple major indices at all-time highs. Tomorrow brings UK Retail Sales data and German PPI. The renewed optimism on U.S.-China trade, with President Trump noting a potential extension to the truce, will also be a supportive factor. The key focus remains on the Federal Reserve’s path, with investors now highly confident in continued easing, a narrative that will be tested by upcoming economic data. Huge options expiries for EUR/USD at 1.1750 ( $3.2 B ) a n d  at 1.1800 ($ 2.5B) are set for today. These levels could act as powerful magnets, potentially containing price action within this range through the European session.