Highlights:

– Nasdaq Composite hits an all-time high; S&P 500 and Dow climb modestly ahead of key inflation reports.

– Broadcom and tech stocks drive momentum, while rate-cut expectations shape investor sentiment.

– Markets brace for upcoming inflation data that may determine the scope of Fed easing.

Markets opened Tuesday morning following gains on Monday, September 8, 2025, when the Nasdaq Composite surged to a record high, and both the S&P 500 and Dow Jones Industrial Average rose amid growing anticipation of Federal Reserve interest-rate cuts in light of the upcoming inflation reports and recent labor-market softness. This dynamic underscores a broader optimism tempered by caution as markets await pivotal data later in the week.

Tech Leads, Indices Advance

The Nasdaq rose around 0.45% to 21,798.70, marking its highest closing level ever and spreading momentum across technology sectors. The S&P 500 gained approximately 0.21% to 6,495.15, while the Dow climbed about 0.25% to 45,514.95. Broadcom emerged as a standout, jumping over 3% after projecting robust AI-related revenue growth and pushing its valuation to around $1.6 trillion. These gains signal investors are embracing tech-led upside while heeding macroeconomic expectations.

Rate-Cut Expectations Build

Recent weak payroll data and softening yields have heightened confidence that the Fed is poised to begin easing. CME’s FedWatch tool now assigns a 90% probability to a 25-basis-point cut in mid-September, with some probability assigned even to a larger 50-basis-point move. Analysts at major banks have increased their forecasted cuts—from two to three quarter-point reductions in 2025, and a potentially larger cut in September. This confidence underpins risk-on sentiment even amid concerns that inflation in services could temper the Fed’s flexibility in the longer term.

Markets Brace for Key Inflation Data

Attention now shifts to crucial inflation readings: the Producer Price Index (PPI) due Wednesday and the Consumer Price Index (CPI) on Thursday. These numbers will be vital in determining the extent of Fed easing—not just in September, but across remaining meetings this year. The latest 10-year Treasury yield, trading near 4.04%, moved lower from recent levels, underscoring market expectations for easing monetary policy.

Broader Market and Corporate Catalysts

Elsewhere, stocks such as Robinhood and AppLovin surged after being named for inclusion in the S&P 500, effective September 22. EchoStar leapt nearly 20% following a $17 billion wireless spectrum deal with SpaceX. Meanwhile, telecom giants like AT&T and Verizon fell over 2% as investor focus shifted to changing sector dynamics.

Looking beyond macro data, traders will also follow earnings and the broader policy backdrop—including geopolitical developments and the evolving U.S. tariff environment—for clues on how resilient corporate earnings and market sentiment may remain.

Markets now fully price in a September cut—with forecasts suggesting up to three quarter-point reductions by year-end. The strength in tech and easing expectations continue to buoy equities. Still, should inflation prove stickier than anticipated, monetary flexibility may be restricted, potentially testing the sustainability of current valuations and investor optimism.