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Weekly Market Recap: Fed Resumes Rate Cuts as U.S. Stocks Hit Historic Quad-Fecta of Records Thumbnail

Weekly Market Recap: Fed Resumes Rate Cuts as U.S. Stocks Hit Historic Quad-Fecta of Records

Business Insights Investment Stock Market

Market Overview

U.S. equities rallied again as the Fed resumed rate cuts, pushing all four major benchmarks to new highs. The S&P 500 gained 1.25% for the week and is now up 14.4% year-to-date, while the Nasdaq rose 2.22% and is up 17.8% in 2025. The Dow added 1.10%, and small caps surged with the Russell 2000 up 2.19%. Growth stocks outpaced value, supported by big tech strength and renewed AI momentum.

Sector leadership came from communication services, up 3.4% on the week, followed by technology at 2.1%. Defensive groups lagged, with consumer staples down 1.2% and real estate off 1.1%. Year-to-date, communication services and technology remain the clear leaders, up 29.2% and 20.3% respectively.

International markets were mixed. The MSCI EAFE dipped 0.18%, while emerging markets gained 1.20% with South Korea and Taiwan leading. In fixed income, the Bloomberg U.S. Aggregate Bond Index fell 0.19% as the 10-year Treasury yield moved up to 4.14% and the 30-year to 4.75%. High yield bonds rose 0.34% as investors favored risk assets. Gold advanced while crude oil was little changed.

Federal Reserve Insights and Economic Roundup

The Fed cut rates by 25 basis points to a range of 4.00%–4.25%, its first move in eight months. Officials described the cut as an “insurance” measure, with inflation still running above target. The decision was 11–1, signaling stronger committee unity, though Chair Powell stressed that future cuts will be decided “meeting by meeting.” Bond markets reacted with higher yields, as investors trimmed expectations for a rapid easing cycle. Markets now anticipate additional cuts in October and December.

The Week Ahead

  • Monday: Chicago Fed National Activity Index (Aug)
  • Tuesday: S&P Global PMIs (Sep prelim), Philly Fed Non-Manufacturing (Sep), Richmond Fed Manufacturing (Sep)
  • Wednesday: MBA Mortgage Applications (Sep 19), New Home Sales (Aug), Building Permits (Aug final)
  • Thursday: GDP (2Q third), Core PCE Price Index (2Q third), Durable Goods Orders (Aug prelim), Jobless Claims, Existing Home Sales (Aug)
  • Friday: Personal Income & Spending (Aug), Core PCE (Aug), Michigan Consumer Sentiment (Sep final)