September 15th, 2025
Stocks rise to kick off Fed week
U.S. equities opened higher Monday as investors position ahead of this week’s Federal Reserve meeting, where policymakers are widely expected to deliver an interest-rate cut. Communication services and consumer discretionary names are leading gains, while consumer staples and health care shares are lagging, underscoring a risk-on tone.
Overseas, Asian markets ended mixed after China’s August industrial production and retail sales came in below forecasts. European equities are firmer, led by financials and real estate.
Economic Takeaways:
- Treasury yields are softer, with the 10-year note at 4.04%. The 10-year Treasury yield recently tested 4.0%, matching its April low, helping drive strong fixed-income returns. U.S. investment-grade bonds — which we view as the core of a diversified fixed-income allocation — have gained 6.4% this year, exceeding their 4.9% starting yield. As the Fed cuts rates, short-term Treasury yields, especially on T-bills, should decline alongside the fed funds rate.
- The U.S. dollar is weakening versus major peers.
- WTI crude trades higher after reports of Ukrainian drone strikes on Russian refineries overnight.
- Bitcoin broke above its 50-day moving average just above $115,000 on Friday, adding to several days of gains, and finishing the week up 3.5%.
- Only four of 11 S&P 500 sectors rose Friday, led by a blend of defensive and cyclical names.
Oracle Jumps on Tik Tok Deal Hopes
Oracle (ORCL) gained 3.15% Monday and Nvidia (NVDA) edged higher as President Trump hinted on Truth Social that the U.S. and China have agreed on a framework to keep TikTok operating. Treasury Secretary Scott Bessent told Reuters the two sides are close to a final deal but said Chinese negotiators want to retain parts of the app they consider soft power.
TikTok faces a Sept. 17 deadline to avoid a U.S. shutdown unless parent ByteDance sells a majority stake or Trump extends the grace period. Trump has granted the app several reprieves despite a law banning it and once moved to block it on national-security grounds. Oracle is the frontrunner to acquire TikTok, with ByteDance limited to a 20% stake under U.S. law.
The app has become a political flashpoint in U.S.–China trade talks, which are underway in Europe. Trump and Chinese President Xi Jinping are expected to meet Friday to discuss trade and TikTok’s future.
Tesla Shares Leap After Musk Buys $1 Billion Stake, Erasing Year-to-Date Losses and Reviving Investor Confidence
Tesla (TSLA) shares surged as much as 8% in early trading Monday, erasing their year-to-date losses after CEO Elon Musk bought $1 billion worth of stock — his first purchase since 2020.
The company disclosed that Musk acquired 2.6 million shares on Friday. Investors viewed the move as a major vote of confidence while Tesla doubles down on autonomous technologies such as robotaxis and humanoid robots.
Musk’s purchase comes a week after Tesla’s board proposed an almost $1 trillion pay package for him, tied to ambitious 10-year targets including expansion of the company’s robotaxi and humanoid robot divisions and a push to grow its market value from about $1 trillion to $8.5 trillion.
Tesla’s rebound follows a March slump triggered by a public clash between Musk and President Trump that later eased. Since Musk’s formal exit from Washington and the shelving of his third-party political ambitions, Tesla shares have climbed more than 70%.
Competition from China’s BYD and the expiration of U.S. EV tax credits continue to pressure Tesla’s core vehicle business, but its autonomous push has gained momentum. The company launched its first robotaxi service in Austin, Texas, in June and plans to begin testing in Nevada soon. Musk has also promoted the Optimus humanoid robot as Tesla’s next major growth driver, forecasting that robots could eventually account for 80% of the firm’s value.
Wall Street sentiment remains mixed: 27 analysts rate Tesla a Buy, 19 a Hold, and five a Sell. Morgan Stanley’s Adam Jonas recently reiterated his Overweight rating with a $410 price target, estimating that converting just 1% of the U.S. labor force to humanoid robots could add roughly $100 per Tesla share.
On the Move
- Deutsche Bank upgraded Micron (MU) ahead of next week’s earnings report, pushing the chipmaker’s shares about 1% higher before the bell. Union Pacific (UNP) is also trading higher after Citi raised its rating to “buy” from “neutral” and increased its price target.
- Pfizer (PFE) and Moderna (MRNA) fell 4% and 7% Friday after a Washington Post report said the Trump administration plans to link COVID vaccines to the deaths of 25 children.
- High-end furniture retailer RH (RH) slumped 4.8% Friday after missing earnings estimates and issuing weaker full-year guidance tied to rising tariff-related costs. CEO Gary Friedman warned on the call that furniture retailers may need deep discounts to spur demand amid a weak housing market and accelerating inflation.
- Oracle (ORCL), which soared earlier last week on upbeat guidance, slid more than 5% Friday but still closed the week up over 32%.
- Warner Bros. Discovery (WBD) added another 16.7% Friday following its double-digit rally Thursday. The Wall Street Journal reported Paramount Skydance (PSKY) is preparing a takeover bid backed by the Ellison family.
- Palantir (PLTR), Super Micro Computer (SMCI), AppLovin (APP) and Advanced Micro Devices (AMD) all supported the Nasdaq Composite Friday. The “Magnificent Seven” also finished strong, led by TSLA, with Apple (AAPL), Microsoft (MSFT), Meta Platforms (META), Nvidia (NVDA) and Alphabet (GOOGL) advancing on optimism ahead of earnings season. Nvidia, however, slipped nearly 2% early Monday after Chinese regulators said the company violated anti-monopoly laws in its Mellanox acquisition.
What’s Ahead
Inflation remains above the Fed’s 2% target, yet the central bank appears poised to resume rate cuts for the first time this year as it emphasizes its maximum-employment mandate.
This week also brings updated quarterly forecasts for interest rates, unemployment, inflation and growth. In June, officials projected the fed funds rate at 3.6% by the end of next year; futures markets are pricing a steeper path of easing, with rates dipping below 3% over the same period.
The Fed’s “dot plot” will be scrutinized for hints of an accelerated pace of cuts to bolster the labor market. We currently anticipate one or two cuts this year, with additional moves next year likely bringing the fed funds rate down to the 3%–3.5% range.
Two additional 25-basis point trims are likely by year-end, according to the CME FedWatch Tool.
Although Trump told reporters Sunday he predicts a “big cut,” odds of a 50-basis point rate cut Wednesday are just 3.8%, likely hindered by last week’s sticky consumer price reading even as recent job data.
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