On September 24, 2025, futures for the S&P 500 and Nasdaq marginally advanced as investors digested Federal Reserve Chair Jerome Powell’s remarks and awaited fresh economic data. Powell’s comments, which struck a measured tone on asset valuations and future policy flexibility, tempered exuberance but left investors cautiously optimistic.

Futures Edge Higher as Markets Balance Caution and Hopes

Despite recent volatility, S&P and Nasdaq futures ticked higher, signaling some resilience in markets even as uncertainty lingers. The modest gains reflect a careful balancing act: investors remain hopeful for further Fed easing, but Powell’s reluctance to commit to aggressive cuts restrains optimism.

Powell warned that equity valuations were “fairly highly valued” and flagged a two-sided risk environment—persistent inflation on one hand, softening labor trends on the other. He emphasized that past rate cuts should not be viewed as a shift toward aggressive easing.

Market Structure Under Scrutiny

A key concern among strategists is the narrow market breadth: only about 17% of S&P 500 stocks have outperformed the broader index in the past three months, a sign of concentration in select large-cap names. Many market participants warn that stretched valuations in top technology names could leave the rally vulnerable to a broadening of weakness.

Adding to complexity, recent gains in tech—driven by hopes around AI and chip demand—have already shown signs of profit-taking. In this context, upcoming data on core PCE inflation, nonfarm payrolls, and housing starts are expected to play an outsized role in shaping near-term market direction.

Global and Regional Ripples

Global equities traded mixed, as results in developed markets diverged. A stronger U.S. dollar, weaker economic cues abroad, and region-specific pressures contributed to uneven performance. In Europe, defense and defense-adjacent stocks outperformed after supportive geopolitical rhetoric from U.S. leadership.

For Israeli and Middle Eastern investors, the U.S. backdrop carries dual importance. Dollar strength and U.S. yields can affect capital flows in and out of local markets; and broader global risk sentiment often spills into emerging markets including Israel.

What to Watch Next

Investors will now turn their attention to:

• Core PCE inflation and CPI data: How sticky inflation remains could determine the Fed’s next move

• Labor data (nonfarm payrolls, unemployment rate): Weakness here may tilt the bias further toward easing

• Powell’s future speeches: Any hint of resolve or hesitation will be parsed for policy shifts

• Sector rotation and breadth: Whether more stocks join the rally or the concentration intensifies

While futures are nudging higher today, the market may be entering a pivotal phase. Powell’s cautious rhetoric suggests that additional rate cuts aren’t guaranteed, especially if inflation surprises. On the other hand, softening employment or consumer data could force the Fed’s hand. In this environment, risk management—and close monitoring of incoming U.S. data—will likely be as important as positioning.