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Economy, Schmonomy. Stocks Get Going into Fed Cuts.
RiskReversal Recap: Thursday, Sept 11th
RiskReversal Media
September 11, 2025
MARKET WRAP
Stocks were higher across all major indices Thursday, shrugging off a slightly hotter CPI and an upside surprise in initial jobless claims as traders focused on falling Treasury yields into next week’s FOMC. Small caps had a day, as signs of speculative fervor begin to emerge. On the day, SPX +0.9%, QQQ +0.6%, and IWM +1.8%.
Elsewhere, the US10YY printed below 4% before ended the day near 4.02%. Gold ticked a new high briefly but ended slightly lower. The dollar was slightly lower. Gold reversed yesterday’s move and is now near $62. The VIX is back below 15.
Notable Gainers: WBD+29%, SNPS +13.%, LRCX +7.6%, MU+ 7.5%, TSLA +5.6%, HD +2.5%, WMT +2.3%
Notable Losers: BA -3.2%, NFLX -3.5%, AVGO -2.7%, ORCL -6.2%, AMD -2.5%
After hours: ADBE is +5% following its earnings release.
MRKT Call: Liz and Dan dig into inflation, labor data, and the Fed’s next move, exploring impacts on rate-sensitive stocks, small caps, how markets may react to Powell’s messaging on rate cuts, and whether this is the beginning of euphoria or closer to the end.
RiskReversal Pod: Guy interviews Vishal Garg, CEO of Better Home and Finance (BETR), on using AI to streamline mortgages, challenges from traditional lenders, the impact of the economy on housing, and the company’s outlook amid shifting interest rates.
MRKT MATRIX: TODAY’S TOP STORIES
Dow jumps 600 points to record as August inflation increase likely won’t derail Fed rate cut (CNBC)
Gold Surpasses Inflation-Adjusted Record High Set in 1980 (Bloomberg)
Alphabet, Meta, OpenAI, xAI and Snap face FTC probe over AI chatbot safety for kids (CNBC)
OpenAI’s $350 Billion Computing Cost Problem (The Information)
Alibaba and Baidu Adopt Their Own AI Chips in Major Shift for Chinese Tech (The Information)
Hyundai Says Battery Plant Delayed After Immigration Raid (Bloomberg)
Plane carrying Hyundai, LG workers detained in immigration raid departs for South Korea (CNBC)
Paramount Skydance Prepares Ellison-Backed Bid for Warner Bros. Discovery (WSJ)
WHAT’S NEXT?
The market hit a bit of escape velocity away from its 6500 consolidation and it likely stemmed from Treasury yields: the 10YY is now threatening to break below the psychologically important 4% level, while the 2YY sits at its lowest point since 2022. IWM outperformed today, and is just shy of its double all time high made in Nov of 2021 and 2024, while signs of speculative fervor are once again emerging in a new batch of meme stocks. As mentioned in yesterday’s email:
Another note, treasury yields slipped back toward the lows of the week following today’s PPI. Near term that is another tailwind and potentially a setup that could broaden participation and give us that escape velocity.
Today’s action highlights a theme that’s been growing over the past two weeks—investors may be willing to overlook signs of medium-term economic weakness if it means lower rates are in play near term. (On today’s MRKT Call, Liz added some nuance to this view as investors may be looking at the wrong yield durations, especially as small caps are concerned.)
As we’ve noted recently, it’s somewhat unusual to see the Fed cutting rates with equities at record highs, particularly against the backdrop of an AI boom that carries echoes of past bubbles. Oracle’s surge yesterday revived memories of the dot-com era, and the current market tone suggests traders are less focused on the health of the economy and more geeked up on the possibility of a Fed driven runaway rally to the upside.
Friday:
10am - UofM Consumer Sentiment, prelim (58)
SPX Expected Move: 0.4%
TODAY’S EPISODES
Watch MRKT Call’s newest episode: Is This Just The Start For Market Euphoria?
Liz and Dan break down the latest inflation and labor market data and what it means for next week’s FOMC meeting. They discuss the yield curve’s impact on rate-sensitive stocks in the near vs. long term, when small caps typically make their run, and how the market might react to Powell’s “explanation” for why rate cuts are necessary during next week’s press conference. Is this just the beginning of euphoria or are we getting closer to the end?
Analysis - US10YY, US2YY, SPX, RSP, ORCL, GOOGL, MU, IWM, TSLA, OPEN, CRCL, KLAR,
SoFi Weekly Report - Snowballing job weakness. Politicization at the Fed.
Butter’s FactSet Earnings - A decrease in tariff mentions on this qtr’s earnings calls
Your Questions:
jay s - Isn't the euphoria meme stocks and SPACs nowadays rather than $IWM
Learn more about our sponsor, SoFi.
Watch RiskReversal Podcast’s newest episode: Unlocking $31 Trillion: The Surprising Power of Home Equity in 2025 with Vishal Garg
Guy Adami interviews Vishal Garg, CEO and Founder of Better Home and Finance (BETR). Vishal shares his entrepreneurial journey from investment banking to creating one of America's leading FinTech companies, aiming to revolutionize the mortgage industry. He discusses his previous ventures like myRichUncle.com and how they paved the way for Better.com. The conversation covers Better's innovative approaches using AI to streamline home equity loans and mortgages, the challenges faced from traditional lenders, and the economic landscape's impact on consumers and the housing market. The discussion also touches on the significant savings Better has achieved for American families and projections for the company's future amidst changing interest rates.
Learn more about our sponsor Betterment, Current, and RBC Capital Markets.
