Market Wrap | Federal Reserve Cuts Rates Amid Employment Concerns Tech Stocks Surge

On September 18, 2025, the Federal Reserve initiated a 25 basis point rate cut, marking a shift in monetary policy focus towards employment concerns over inflation. This decision comes as the labor market faces increasing risks, with employment growth slowing and unemployment slightly rising. The Fed's signals indicate a potential continuation of rate cuts if necessary, aiming to manage economic challenges and ensure a soft landing for the economy. Meanwhile, the S&P 500 index rose by 0.48%, the Dow Jones Industrial Average increased by 0.27%, and the Nasdaq Composite gained 0.94%.

In today's market, the technology and industrial sectors outperformed the S&P 500, with both sectors showing strong performance. Conversely, the energy, materials, and consumer goods sectors moved in the opposite direction of the S&P 500.

Nvidia's announcement of a £20 billion investment in the UK AI startup ecosystem reflects its commitment to expanding AI capabilities and could influence tech stocks, particularly those related to AI, in the US market. The Federal Reserve has initiated a 25 basis point interest rate cut, marking a shift in its monetary policy focus from inflation to employment, which could impact market sentiment and investor behavior in the US equities market. The acquisition of $5 billion in Intel shares by Nvidia, alongside their collaboration in the data center and personal computing sectors, has led to a significant pre-market rise in Intel's stock, signaling potential shifts in the tech industry landscape. Additionally, the NASDAQ Composite Index reaching a new all-time high indicates positive investor sentiment, potentially driven by these tech developments and Fed actions.