Wall Street Holds Near Records, Investors Await Fed Rate Cuts

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Wall Street Holds Near Records, Investors Await Fed Rate Cuts/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks hovered near record highs Tuesday as investors awaited the Federal Reserve’s first expected interest rate cut of the year. Retail sales rose more than forecast in August, signaling resilient consumer demand despite tariffs and inflation. Attention now turns to Fed Chair Jerome Powell’s guidance, which could shape markets through 2026.

Specialist Anthony Matesic works at his post on the floor of the New York Stock Exchange, Monday, Sept. 15, 2025. (AP Photo/Richard Drew)

Quick Look (bullet points)

S&P 500: Down 0.1% from record close
Dow Jones: Fell 131 points (0.3%)
Nasdaq: Flat at Tuesday’s open
Fed focus: First interest rate cut expected Wednesday
Retail sales: Up 0.6% in August, topping forecasts
Market movers: Oracle +2.9%, Chipotle +1.2%, Dave & Buster’s -16.9%
Global markets: Nikkei hits record despite Japanese PM’s resignation
Bond market: 10-year Treasury yield eases to 4.03%

Wall Street Holds Steady Near Record Highs as Fed Decision Looms

Deep Look

NEW YORK (AP) — U.S. stocks hovered around record levels Tuesday as investors waited for the Federal Reserve’s expected interest rate cut, the first of the year.

The S&P 500 slipped 0.1% after closing at an all-time high on Monday. The Dow Jones Industrial Average fell 131 points (0.3%), while the Nasdaq composite was flat.

Fed Cut in Focus

Markets have surged this summer on expectations the Fed will begin easing rates Wednesday, with traders betting on more cuts through 2025 and into 2026. The move is intended to cushion a slowing job market, which investors now see as a bigger threat than persistent inflation pressures tied to President Donald Trump’s tariffs.

Though inflation remains above the Fed’s 2% target, policymakers appear ready to shift course. A new Commerce Department report showed retail sales rose 0.6% in August, topping forecasts. Some of that growth likely reflects higher prices, but steady consumer spending has helped keep recession fears at bay.

Attention will center on Fed Chair Jerome Powell’s press conference and the central bank’s updated economic projections, both of which could set the tone for markets through year’s end.

Investor Sentiment

A Bank of America survey found global fund managers are more overweight in stocks than at any point in the past seven months. Still, a record 58% believe equities look overvalued at current levels — underscoring worries that Wall Street’s rally could prove fragile.

Movers on Wall Street

Oracle (+2.9%) — Lifted by speculation it could be part of a deal to keep TikTok operating in the U.S.
Steel Dynamics (+5.1%) — Reported stronger earnings across its units, citing robust demand from construction and autos.
Chipotle (+1.2%) — Announced a new $500 million stock buyback program, boosting investor confidence.
Dave & Buster’s (-16.9%) — Tumbled after reporting weaker-than-expected quarterly profits.
Ralph Lauren (-2%) — Outlined its “Next Great Chapter: Drive” plan, but analysts gave the strategy a lukewarm response.
New York Times Co. (-2.9%) — Slipped after Trump filed a $15 billion defamation lawsuit against the paper and four journalists, tied to coverage before the 2024 election.

Global Markets

European indexes fell after a mixed Asian session.

Japan’s Nikkei 225 rose 0.3%, setting another record despite political uncertainty. Prime Minister Shigeru Ishiba announced his resignation, with the ruling party expected to elect a new leader on Oct. 4.

In bonds, the 10-year U.S. Treasury yield dipped to 4.03% from 4.05% late Monday.

Bottom line: Wall Street is holding its breath. If Powell signals a slower pace of cuts than traders expect, markets could see sharp swings despite the recent rally.