US Equity Indexes Rise This Week as Fed Seen Cutting Rates 75 Basis Points by Year-End

04:56 PM EDT, 09/12/2025 (MT Newswires) -- US equity indexes ended higher this week, with all three benchmark gauges hitting all-time highs, as market expectations for interest-rate cuts this year imply the Federal Reserve will prioritize tackling the weak labor market over lingering inflationary pressures.

* The S&P 500 closed at 6,584.29 on Friday versus 6,481.50 a week ago. The Nasdaq Composite stood at 22,111.10 compared with 21,700.388 a week earlier. The Dow Jones Industrial Average ended at 45,834.22, versus 45,400.86 at the end of last week.

* Ahead of the Federal Reserve's two-day monetary policy meeting next week, markets are pricing a 77% probability that the Fed will lower interest rates by 75 basis points between now and December, up from 65% a week ago, according to the CME FedWatch Tool. There is zero chance, unchanged from a week earlier, that the Fed will leave rates unchanged on Sept. 17, meaning the policy easing cycle will resume this month.

* The Bureau of Labor Statistics' preliminary estimate of its benchmark revision to nonfarm payrolls is for a downward adjustment of 911,000 jobs, or 0.6% of total employment, the BLS said Tuesday. BLS said the absolute average revision over the last 10 years is 0.2%.

* The producer price index surprisingly fell in August from a downwardly revised increase in July. Annually, producer prices growth decelerated. The consumer price index rose more than forecast month-over-month in August, and while it accelerated annually, the increase was in line with the outlook. However, core inflation rates remained unchanged in August both sequentially and annually, coming in line with expectations.

* "The [inflation] report will be scrutinized for signs that the parts of the CPI basket not affected by tariffs (e.g., core services) are seeing enough disinflation to justify an extended rate cut cycle," Macquarie Group said in a note.

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