September 19

All Major Indexes Hit New Highs

Markets continued their march to new highs this week, with all three major indices hitting fresh all-time records. Small caps also joined the rally, as the Russell 2000 notched its first all-time high since November 2021.

Federal Reserve Cuts Rates, Signals More Ahead

The long-awaited September FOMC meeting took place on Wednesday, where the Federal Reserve cut interest rates by 0.25%—in line with market expectations. The Fed’s consensus outlook now projects two additional quarter-point rate cuts in 2025 (likely at the October and December meetings) and one more cut expected in 2026.

While this easing path was largely priced in, lower borrowing costs can help fuel economic growth and reduce valuation multiples—creating more room for stocks to climb in what remains an “expensive” market by historical standards.

Key U.S. Data Releases Mixed

Beyond the Fed decision, investors also digested several key data releases:

  • U.S. retail sales rose 0.6% in August, doubling expectations of 0.3%
  • Import prices rose 0.3%, far above the expected -0.2%
  • Initial jobless claims came in below expectations and well below last month’s levels, signaling fewer near-term concerns in the labor market

Market Outlook

Taken together, the combination of Fed easing and resilient economic data remains supportive of risk assets. We believe this backdrop will continue driving markets higher through year-end and into 2026.