Trade Secrets

WTF Dailies September 12, 2025

US stock futures were steady late Thursday as Wall Street took stock of the US economy from a lofty, record-setting perch ahead of the Federal Reserve's highly anticipated decision on interest rates next week.

Sage Kakkat

11 Sep 2025 — 6 min read

US stock futures were steady late Thursday as Wall Street took stock of the US economy from a lofty, record-setting perch ahead of the Federal Reserve's highly anticipated decision on interest rates next week.
Investors have took in several weeks' worth of economic data to gain clues on the Fed's next move. Over the last week, jobs data has shown clear signals of labor market weakness, with just over 20,000 jobs added last month and initial jobless claims surging to a near four-year high.
Meanwhile, inflation remains stubborn, with consumer prices rising last month amid more signs that President Trump's tariffs are filtering their way into the economy. But investors are betting inflation is tame enough for the Fed to cut next week — and then some.
Traders are pricing in a more than 90% chance of a quarter-point cut when the Fed holds its September meeting. Beyond that, around 80% expect the central bank to cut the equivalent of three times before the end of the year.
Asian stock markets extended their rally on Friday, with technology and chipmaker shares leading gains, as investors tracked record highs on Wall Street amid expectations of a Federal Reserve rate cut next week.
Hong Kong and South Korea were the top performers, while Japan’s Nikkei 225 reached a fresh record high despite political unrest in the country.
All three benchmark U.S. stock indexes closed at record highs on Thursday, driven by strong tech sector performance amid renewed AI optimism.
Investors reacted positively to a mixed set of U.S. economic data, which fueled speculation that the Federal Reserve would reduce interest rates at its upcoming meeting.
South Korea’s KOSPI index jumped 1.3%, buoyed by SK Hynix Inc (KS:000660), which surged nearly 6% to a record high after announcing the completion of its next-generation high-bandwidth memory, HBM4, and preparations for mass production.
The memory chip, aimed at artificial intelligence applications, offers double the bandwidth and more than 40% improved power efficiency compared with its predecessor.
Hong Kong’s Hang Seng index advanced 1.6%, with Hang Seng TECH sub-index surging nearly 2.5%.
Japan’s Nikkei 225 climbed over 1% to 44,888 points, a fresh record peak, despite political uncertainty following Prime Minister Shigeru Ishiba’s resignation.
Japan’s broader TOPIX index gained 0.7%, also hitting fresh record highs of 3,171.77 points.
Data on Thursday showed that the U.S. consumer price index rose 0.4% month-on-month in August, slightly above expectations, while weekly jobless claims jumped to 263,000, pointing to a softening labor market.
The mixed signals did little to alter expectations that the Fed will cut interest rates at its Sept. 16-17 meeting.
Traders in futures markets are pricing in a near-certainty of a 25-basis-point reduction, with slim odds of a larger half-point move.
Back in Asia, mainland China’s Shanghai Composite edged 0.2% higher, while the Shanghai Shenzhen CSI 300 was largely steady. Both indices saw sharp gains in the previous session.
Australia’s S&P/ASX 200 rose 0.7%, while Singapore’s Straits Times index edged down 0.3%.
India’s Nifty 50 ticked 0.2% lower at open on Friday.
Market sentiment has been subdued amid U.S. tariff pressures, as media reports stated that President Trump has urged the European Union and other allies to target India and China by imposing steep tariffs.

Market Close

U.S. equity markets were mixed on Friday, with the technology-focused Nasdaq index 0.4% higher, the large-cap S&P 500 index broadly flat, and the Dow Jones Index down 0.6%. This followed a cautiously upbeat tone in international equity markets overnight, with European benchmarks generally higher, and the Japanese Nikkei index up almost 1% over the session.
Following a robust rally over September, government bond markets sold off to close the week, with the yield on the 10-year U.S. Treasury note up 4 basis points over today's session (0.04%). However, at 4.06%, the 10-year remains very close to the bottom of its 2025 range.
The dollar was a touch stronger against a trade-weighted basket of international currencies and WTI oil rallied on fears that Ukrainian drone attacks could disrupt Russian oil supply.
The Michigan Survey of U.S. consumer sentiment fell in September to its lowest reading since May, with households reporting rising concerns over inflation and the labor market. The preliminary survey showed that consumers expect inflation to run at 3.9% over the next five years, up from 3.5% in last month's survey.
At the same time, fears over job losses were more pronounced in the report, echoing signs from recent labor-market indicators that hiring remains slow and layoffs have started to tick a little higher. These data, in our view, will add to market expectations that the Fed will ease policy next week, with warning signs around the health of the economy starting to emerge, and the pass-through of tariffs into domestic inflation rates having been relatively modest up to now.
A Fed cut next week is fully priced into short-term money markets. Arguably more important than the rate decision itself will likely be the signals that the FOMC provides around the path for monetary policy further forward in its updated interest-rate projections. Back in June, the median FOMC member was anticipating two 25 basis point (0.25%) cuts this year and just one in 2026, around half of the 150 basis point (1.5%) easing currently priced into markets over this period.

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