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Post Fed Rally Means New Highs for Small Caps
RiskReversal Recap: Thursday, Sept 18th
RiskReversal Media
September 18, 2025
MARKET WRAP
Equities pushed higher across the board today, led by semis on the Nvidia/Intel news, but also cybersecurity, small caps and more. IWM finally closed at a new all-time high, last established in 2021 and 2024. All of this as treasury yields continued to tick higher since yesterdays rate cut. On the day, SPX +0.5%, QQQ +1% and IWM with a +2.5% move to new all time highs.
Elsewhere, the US10YY closed 4.11%, a fairly decent move higher from yesterday’s quick dip below 4% on the Fed statement. Gold was lower by -1%, DXY higher again, now $97.38. Oil slightly lower as with the VIX into tomorrow’s expiry, now 15.70.
Notable Gainers: INTC +23%, SNPS +12.9%, CRWD +13%, COIN +7.3%, AMAT +6.7%, KLAC +6.1%, MU 5.4%, PLTR +5%, CAT +3.4%
Notable Losers: ARM -4.6%, DRI -7.4%, SPGI -6.9%, MCO -6.2%, TTD -2.6%, V -2.1%
After hours: FDX is +7.5% on earnings, LEN is unched. SPY is slightly higher.
MRKT Call: Liz, Guy, and Dan discuss the post-Fed cut tension between rising yields and rising stocks, the risks of reigniting inflation, and the latest on Intel, plus a look at software names.
RiskReversal Pod: Dan & Guy with a rapid reaction to the Fed's 25 basis point rate cut, and the moves in equities and treasuries.
MRKT MATRIX: TODAY’S TOP STORIES
S&P 500, small-cap Russell close at all-time highs a day after Fed rate cut (CNBC)
Wells Fargo raises S&P 500 targets (CNBC)
David Tepper says don’t fight the Fed, and investors don’t plan to (CNBC)
The stock market could see nearly 50% upside if investor allocations reach dotcom bubble levels (CNBC)
Nvidia to Invest $5 Billion in Intel, Furthering Trump’s Turnaround Plan (WSJ)
US Government’s Intel Stake Worth $14 Billion After Nvidia Deal (Bloomberg)
Meta Launches $799 Glasses With Screen and AI Integration (Bloomberg)
Google adds Gemini to Chrome for all users in push to bolster AI search (CNBC)
CrowdStrike pops 12% on upbeat long-term guidance at investor day (CNBC)
Trump floats pulling licenses if networks are ‘against’ him after Jimmy Kimmel suspended (CNBC)
FTC Sues Ticketmaster Alleging Illegal Ticket Resale Tactics(WSJ)
WHAT’S NEXT?
Treasury yields were higher for the second straight day following yesterday’s Fed rate cut. There’s not a ton to read into that yet other than a sign the Fed decision was well priced in, or, as mentioned by Liz on today’s market call, some contradictions between the SEP and dot plot. Bottom line for now, equities aren’t concerned at all and actually may now be reacting more confidently to the move lower in yields we’ve seen over the past month. One barometer on that is IWM may be poised for a breakout from a triple top dating all the way back to 2021.
Should we now see a small and mid-cap surge, it would be an interesting sentiment check on the broader rally. A successful IWM breakout could spark euphoric, even parabolic, upside across most equities, and even revive meme-stock style action. That’s a possibility that we’ve been highlighting the past two weeks in this space. We’ll know soon if small caps follow through or were simply playing catch-up. If we do see a breakout from here it would likely accompany an uptick in volatility. What’s that look like? Speculative retail action in upside calls, gamma squeezes, short squeezes, new meme stocks, you’ve seen it before.
Tomorrow’s triple/quad witching expiration likely limits the likelihood of a big move into the weekend, but following tomorrow’s expiration a lot of the gamma-related dampening of the past two weeks will be gone and could set the stage for the market’s next decisive move. Outside of expiry tomorrow, it’s an otherwise quiet day on the earnings or macro front:
Friday, Sept 18th
Quad witching expiration
SPX Expected Move: 0.5%
TODAY’S EPISODES
Watch MRKT Call’s latest episode: Stocks Hit New Highs After Fed Cut
Liz joins Guy and Dan to talk the relationship problem between rising yields and rising stocks since yesterday’s Fed cut, highlighting the difference between the dot plots and the SEP released yesterday and the risks of re-triggering inflation. Plus, the Intel news, software names, and more.
Analysis - SPX, US10YY, DHI, BKX, NVDA, INTC, IGV, CRM, FIG, ORCL, IWM, HACK, PANW
Your Questions
Jack CF - What will it take for IWM to break out?
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RiskReversal Podcast’s latest episode: Rapid Reaction: Fed Delivers Expected Rate Cut
Dan & Guy with a rapid reaction to the Fed's 25 basis point rate cut, and the moves in equities and treasuries.
Learn more about our sponsor SoFi.
