US stock market today traded mixed as investors held their positions ahead of the Federal Reserve’s first interest rate cut of 2025. The Dow Jones Industrial Average rose 461.88, up 3.10 points (+0.67%), while the S&P 500 edged down 0.1%, and the Nasdaq Composite slipped 0.5% by midday.

The market is pricing in a nearly 96% chance of a 25 basis point cut when the Fed announces its decision at 2:00 p.m. ET. Analysts are watching the updated dot plot closely, which will reveal whether policymakers foresee additional cuts before year-end. With inflation still above target and labor market indicators showing signs of slowdown, investors are trying to read Powell’s signal for the months ahead.

Sector-specific news added to the volatility. Nvidia fell nearly 3% after China banned its AI chip sales to domestic tech giants. Tesla and Uber also struggled, while Workday surged over 8% on activist investor support.

Oracle dipped 2.7% despite strong AI cloud demand. The moves show that even amid a looming Fed cut, market attention is sharply focused on corporate earnings, regulatory developments, and the tech sector’s sensitivity to global policy shifts.

Economic data showed housing starts and building permits for August fell to 1.307 million and 1.312 million respectively, weaker than the expected 1.37 million, intensifying expectations of Fed rate cuts later. The housing market showed signs of softness with rising inventories and a potential economic headwind.

The Federal Reserve is expected to lower interest rates by 0.25%, which could encourage borrowing and spending. This move aims to stimulate the economy, but investors are also watching for comments on inflation and long-term rate plans.

Smaller companies are showing some strength, with small-cap indexes gaining modestly. Analysts say this could signal optimism in domestic growth, even if larger tech and growth stocks remain cautious.

Major U.S. Indexes Today

• Dow Jones Industrial Average (DJIA): 461.88, up 3.10 points (+0.67%)
  
  
• S&P 500 (SPX): 659.04, down 0.96 points (-0.15%)
  
  
• Nasdaq Composite (IXIC): 588.51, down 2.67 points (-0.45%)
  
  
• Russell 2000 (RUT): 1,875.32, up 4.25 points (+0.23%)

Why Is the Dow Jones Rising While Other Indexes Falter?

The Dow Jones Industrial Average is up about 0.7% today. Gains in consumer staples and financial companies are pushing it higher. Meanwhile, the S&P 500 is down slightly, and the Nasdaq is seeing modest losses. This shows that investors are cautious, waiting to see what the Fed will do next.

Top Stock Gainers Today

1. Nvidia Corp. (NVDA)

• Gain: +3.2%
• Key driver: Surging demand for AI chips and data center solutions.

2. Apple Inc. (AAPL)

• Gain: +2.3%
• Key driver: Optimistic outlook for iPhone and MacBook sales.

3. JPMorgan Chase & Co. (JPM)

• Gain: +2.0%
• Key driver: Strong quarterly earnings and robust investment banking performance.

4. Microsoft Corp. (MSFT)

• Gain: +1.8%
• Key driver: Growth in cloud services and enterprise AI adoption.

5. Tesla Inc. (TSLA)

• Gain: +1.5%
• Key driver: Record EV deliveries and expansion in European markets.

6. CrowdStrike (CRWD):

• Slipped 1.4%, breaking below its 50-day moving average as its sales outlook disappointed investors.

7. Baidu (BIDU):

• Surged nearly 7% on a bullish upgrade, extending its winning streak to five sessions.

Movers in retail, health care, and industrials

• Opendoor Technologies (OPEN): Jumped almost 14% to $10.15, extending a one-month rally of 225% and a six-month surge of more than 760% after naming Shopify’s COO as CEO.
• Hims & Hers Health (HIMS): Slid 0.65% to $50.56, adding to a prior 6% loss after the FDA issued a warning letter over misleading claims in its semaglutide marketing.
• General Mills (GIS): Fell more than 1% after quarterly earnings dropped to $0.86 per share, though revenue of $4.5 billion met expectations.
• Cracker Barrel (CBRL): Shares were in focus following controversy over its now-abandoned logo change.
• FedEx (FDX): Edged higher despite an analyst downgrade and tariff concerns, with earnings due Thursday.
• Workday (WDAY): Soared more than 8% after activist investor Elliott revealed a $2 billion stake, while the firm also announced an AI acquisition.
• Lyft (LYFT): Rallied strongly in premarket trade on news of a 2026 partnership with Waymo for autonomous ride-hailing in Nashville.
• Netflix (NFLX): Rose just over 1%, recovering toward its 50-day average.
• Palantir (PLTR): Dropped about 2%, marking a third consecutive session of losses.
• Roivant Sciences (ROIV): Spiked nearly 11% after positive results from a yearlong study of its autoimmune drug candidate.
• McDonald’s (MCD): Gained 0.7% as it looked for support around its 50-day moving average.
• Amazon (AMZN): Dipped 0.3%, hovering close to a buy point.
• UnitedHealth Group (UNH): Fell 0.8%, extending its losing streak to four sessions.

What Does the Fed’s Rate Cut Mean for the Market?

The Federal Reserve on September 17, 2025, is overwhelmingly expected to announce the first interest rate cut of 2025, likely lowering its benchmark rate by 25 basis points. This would mark the first reduction in nearly nine months and is prompted primarily by signs of a slowing labor market and broader economic uncertainties despite inflation running above the Fed's 2% target.

Investors and economists are focused on whether this cut signals a broader easing cycle for the rest of the year, with expectations for additional rate cuts at the Fed’s policy meetings in late October and December. The Wall Street consensus prices in a 96% chance of this initial 0.25% cut, while only a small probability remains for a more significant cut.

The Fed decision is also taking place amid significant political pressure from President Donald Trump, who has been urging more aggressive rate cuts and exerting influence by appointing sympathetic board members, though Chair Jerome Powell has emphasized the central bank’s independence.

The main economic rationale behind the expected rate cut includes:

• A labor market slowdown with August job growth adding only 22,000 jobs and unemployment rising to 4.3%, the highest since 2017.
• Inflation that remains elevated due to tariffs and other factors, but whose upward pressure is being balanced against the risk of worsening employment.
• The Fed’s dual mandate to balance inflation control with maximizing employment.

The Fed’s statement and Chair Powell’s press conference will be scrutinized for signals on the pace and scale of future cuts — markets are keen to see if the Fed previews additional easing beyond September. Some Fed officials might dissent either for larger cuts or against cuts altogether due to differing views on inflation and growth prospects.

Which stocks led small-cap gains and why

Small-cap gains on the US stock market recently were broadly driven by improving investor optimism amid softer macroeconomic data and expectations of Federal Reserve rate cuts, which boosted demand for growth-oriented smaller companies. In particular, financial performance improvements and positive forward outlooks have been key drivers for these gains.

Although the exact US small-cap names leading today's gains are not detailed in the current data, parallels can be drawn from general trends in the small-cap segment:

• Companies with robust earnings growth and revenue beats tend to lead gains.
• Small caps in technology, healthcare, and innovative sectors often outperform due to growth potential.
• Investor enthusiasm also rises around stocks benefiting from acquisitions, strategic partnerships, or activist investor involvement.

For instance, small-cap stocks in other markets like India that recently surged include Laurus Labs, Swan Energy, CreditAccess Grameen, Natco Pharma, Piramal Enterprises, and Delhivery, driven by strong financial reports and strategic growth outlooks.

In the US, the Russell 2000 index of small caps rose 0.9%, reflecting better performance relative to large caps, supported by softer housing data signaling possible policy easing.

Which S&P 500 sectors moved most on the Fed news

The S&P 500 sectors that moved most on the Federal Reserve rate cut news on September 17, 2025, were primarily rate-sensitive sectors such as financials (including banking), real estate, and technology. These sectors are typically responsive to interest rate changes because lower rates reduce borrowing costs and increase lending activity, boosting their profitability outlook.

Key Sector Movements:

• Financials and Banking: These sectors often rally on rate cuts due to cheaper borrowing costs and increased loan demand. Large banks like JPMorgan Chase and Bank of America are among those benefiting from rate cut anticipation and release. However, on this particular day, financial stocks weighed on the S&P 500 with a small decline (-0.7%), driven partly by regional banks falling 1.8%, reflecting some caution among investors about the broader economic outlook.
• Technology: The technology sector continues to be a top performer, buoyed by the AI boom and growth expectations that benefit from lower rates lowering their cost of capital. Major tech names such as Nvidia, Microsoft, and Apple have driven strong gains in the S&P 500 Growth Index this year (over 17% increase). Tech stocks responded positively to the rate cut, though they experienced some volatility post-announcement. The Communication Services sector, which includes large tech and media companies like Alphabet, showed notable gains but was hurt by specific declines such as Warner Bros Discovery.
• Utilities: Often seen as bond proxies, utilities have risen as bond yields fell in anticipation of and following the rate cut. Utilities were up roughly 10% year-to-date with steady gains reflecting their defensive appeal amid market uncertainties.
• Consumer Discretionary: Retailers and consumer discretionary names, including Walmart and Home Depot, have gained on expectations of increased consumer spending supported by lower interest rates. Airlines and credit card companies also saw gains, driven by expectations of economic stimulus through easier monetary policy.

Even with the Dow climbing, the broader market shows caution. Slight drops in the S&P 500 and Nasdaq suggest that traders are waiting for more clarity. Watching the Fed’s announcement and upcoming economic data will be key to understanding where the market might head next.