Stocks Slip as Big Tech Weakens, Fed Stays Cautious
2025-09-23 23:58
Market Recap
US stock indexes closed lower on Tuesday after touching record highs earlier in the week. The S&P 500 fell -0.55%, the Dow Jones slipped -0.19%, and the Nasdaq 100 lost -0.73%. December futures on the S&P and Nasdaq dropped -0.54% and -0.70% respectively. The pullback was mainly driven by weakness in the “Magnificent Seven” megacap technology stocks, which dragged the broader market down.
Fed Signals and Economic Data
The Federal Reserve offered no new guidance on rate cuts at its upcoming October meeting. Fed Chair Jerome Powell noted that “inflation risks remain tilted to the upside, while employment risks are tilted to the downside,” leaving the central bank with limited options. Still, markets are pricing in a 91% chance of a 25 bp rate cut at the October 28–29 FOMC meeting.
Economic data added to concerns. The September S&P Global Manufacturing PMI fell to 52.0 versus expectations of 52.2, while the Richmond Fed manufacturing index plunged to -17 from -10, pointing to industrial weakness.
Bonds and Oil
Treasury yields moved lower, with the 10-year note yield dropping 3 bps to 4.12% after weak macro reports and dovish comments from Fed Governor Michelle Bowman, who argued for proactive rate cuts. European bond yields were mostly lower as well.
Oil prices rose more than 1%, pushing energy producers higher and making the sector one of the few bright spots on the day.
Corporate Movers
Big Tech stocks saw broad weakness: Amazon fell more than 3%, Nvidia lost over 2%, while Tesla, Meta, and Microsoft declined more than 1%. Apple and Alphabet also ended in the red.
Crypto-linked stocks retreated as Bitcoin fell over 1%. Coinbase, MARA, and Riot dropped between 2–3%.
Other notable movers included:
Firefly Aerospace: -15% after weak quarterly revenue.
Vistra Corp: -6% after a downgrade from Jefferies.
Vertiv and Eaton: down after Microsoft unveiled an in-chip server cooling system.
Halliburton: +7% on oil strength.
McKesson: +6% after raising EPS guidance.
Sempra: +4% after selling a stake in its infrastructure unit to KKR and CPPIB.
Boeing: +2% on reports of a large pending China order.
Palantir: +1% after winning a US Treasury Department contract.
This week, markets will watch housing data, GDP updates, and the Fed’s preferred inflation gauge — the PCE price index. The combination of slowing economic momentum and resilient corporate earnings could increase pressure on the Fed to ease policy, even as inflation risks persist.
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