September 15-19: Stock Market Outlook & Strategy

Markets Rally as Inflation and Jobless Claims Signal Fed Rate Cuts

Stocks hit new all-time highs as August’s CPI data and weekly jobless claims reinforced expectations that the Federal Reserve will soon begin cutting interest rates.

The 10-year Treasury yield briefly dipped below 4% before settling at 4.11%.

The S&P 500 advanced 0.85%, while the Nasdaq gained 1.05% during the week.

Regarding inflation, August’s consumer price index largely met forecasts, leaving markets largely steady. Headline CPI increased 0.4% month-over-month and 2.9% year-over-year, in line with predictions. Core CPI rose 0.3% month-over-month and remained steady at 3.1% year-over-year.

The Fed’s “Supercore” measure — which tracks core services excluding shelter — eased slightly to 0.33% month-over-month from 0.48%, with the annual rate steady at 3.21%. This stability signals that inflation isn’t picking up again, even as progress toward the Fed’s 2% target remains slow.

Equity markets initially dipped following the report but quickly rebounded into the session. Meanwhile, the 10-year Treasury yield dropped below 4% for the first time since April, and the yield curve steepened, with the spread between 2-year and 10-year notes widening to 51 basis points.

U.S. 10-Year Government Bonds Yields

Source: Trading View, Ki-Wealth analysis

On the labor front, weekly jobless claims jumped to 263,000 — the highest since October 2021 — surpassing the estimated 235,000. The four-week average rose to 240,500, while continuing claims held steady near 1.94 million.

Taken together, the inflation data confirms that price pressures aren’t intensifying, while the uptick in jobless claims suggests a softening labor market. This combination bolsters the case for the Fed to start cutting rates, a move markets are already pricing in through early 2026.

With the 10-year yield slipping below 4% for the first time in months, conditions remain favorable for rate-sensitive sectors like technology, housing, and utilities. Meanwhile, softer labor data could renew interest in defensive stocks and dividend-paying companies.

Equities barely flinched when the CPI numbers were released, since they aligned with expectations. But once the market opened, buying momentum took hold and persisted throughout the week.

Market Sentiment Analysis: Signs of a Fragile Euphoria

During the week of September 8 – September 12, sectors including technology, utilities, financials, and communication services outperformed the broader stock market, while healthcare and consumer defensive sectors lagged. The Crypto Fear & Greed Index rose sharply to 57, entering the “Greed” territory and signaling increased bullish sentiment among traders. This elevated level reflects growing confidence and a greater willingness to accept risk, though it also heightens the potential for market corrections should optimism become excessive.

Stock Market Performance by Sector, Week of September 8, 2025

Source: Finviz, Ki-Wealth analysis

Ki-Wealth’s recent analysis characterizes the stock market as being in a “euphoric phase,” reminiscent of the pre-2000 Tech Bubble and the post-pandemic rally. This phase is considered particularly vulnerable, with a significant risk of correction. Although a negative performance was anticipated for the week of September 8, the market defied expectations, reaching new highs with the S&P 500 surpassing the key psychological threshold of 6,500. Should this momentum persist, the index could climb to 6,950 under a bullish scenario.

Valuation metrics underscore the market’s fragility. The S&P 500’s trailing price-to-earnings ratio stands at 28.4, positioning it within the highest decile of historical valuations—levels typically associated with negative median returns. Forward P/E ratios across the broader market are at their highest in over twenty years, extending well beyond just the technology sector. Given these elevated valuations and prevalent investor complacency, caution is advised. Pursuing stock purchases at these levels carries heightened risk.

These widespread signs of overvaluation and complacency are classic indicators of market euphoria. According to Ki-Wealth’s assessment, such conditions present a substantial challenge for sustaining future stock gains and increase the likelihood of a market adjustment in the months ahead.

S&P 500 Index Daily Technical Chart

Source: Trading View, Ki-Wealth analysis

Looking ahead, Fed funds futures continue to price in four straight quarter-point cuts by January 2026, with traders increasingly betting on at least two additional reductions by the end of 2025. The market’s muted initial response reflects that these expectations were already well priced in.

FedWatch probabilitiesshow a near-certainty (100%) of a 25 basis point rate cut in September, with a small chance (5%) of a 50 basis point move. October’s odds lean heavily (87%) toward a 50 basis point cut, with a modest chance (5%) of a 75 basis point reduction. By December, the market sees an 82% probability of rates being 75 basis points lower than today — essentially pricing in three full cuts.

During the week of September 15, the 25 basis point move will be closely watched for guidance. Fed Chair Powell and the FOMC’s language will either confirm the market’s rate-cut expectations or signal a more cautious approach.

Key Economic Events and Market Outlook: September 15–19, 2025

The week of September 15 to 19, 2025, promises to be a defining period for the stock market, with several important macroeconomic releases and a critical Federal Reserve interest rate decision shaping investor sentiment.

The week kicks off on Monday, September 15, with the release of the U.S. Empire State Manufacturing Index for September. The previous reading stood at 11.9, above the forecast of 10.0. Should the upcoming figure surpass expectations, it would signal stronger regional manufacturing activity and provide a positive boost to the market.

Tuesday, September 16, brings a mixed bag of data. Retail Sales for August are expected to show a 0.5% month-over-month increase, slightly above the 0.4% forecast, reflecting robust consumer spending. Meanwhile, Industrial Production is projected to decline by 0.1%, underperforming the anticipated 0.2% gain, and Capacity Utilization is forecasted at 77.8%, a bit higher than the previous 77.5%. These contrasting signals suggest a divergence between consumer strength and industrial weakness.

Wednesday, September 17, stands out as the week’s pivotal day. Housing Starts for August are expected at 1.428 million, well above the forecast of 1.37 million, indicating resilience in the housing market. However, Building Permits are anticipated to fall by 2.2%, contrary to the modest 0.6% gain forecasted. Most crucially, the Federal Reserve’s interest rate decision is expected to deliver a 0.25% cut, bringing rates to a 4.00%-4.25% range—a move already largely priced in by the market. The real market focus will be on Fed Chair Powell’s accompanying remarks and the outlook for rates through year-end. Investors will be eager to learn if this cut marks the start of a broader easing cycle. A clear signal of continued rate cuts could spark a sustained rally, particularly benefiting small-cap stocks and sectors sensitive to interest rates, such as real estate, industrials, and construction.

Stock Market Reaction: Scenarios For Interest Rate Cut

Source: Ki-Wealth Research

Thursday, September 18, features the release of the Current Account data for July, showing a strong external position at €38.9 billion, well above the €32.4 billion forecast. Construction Output year-over-year growth is expected to slow to 1.7%, below the 2.1% forecast, hinting at some softness in the sector.

Friday, September 19, sees no major data releases, but investors will still monitor European Central Bank macroeconomic projections for further clues on the region’s economic trajectory.

Overall, this week’s economic calendar is packed with data points that could set the tone for markets heading into the final quarter of 2025, with the Fed’s decisions and guidance at the center of attention.

S&P 500 Trading Strategy for the Week of September 15, 2025

As we approach the week of September 15 through 19, 2025, Ki-Wealth provides a detailed overview of the trading strategy for the S&P 500 index based on current technical and fundamental indicators.

Technical Snapshot (as of September 14, 2025)
The S&P 500 is currently trading around the 6,500 level. The long-term trend remains bullish, although the index is experiencing a period of short-term consolidation. Key support and resistance levels to monitor include:

• Support Levels:
  • 6,400, which is currently being tested as short-term support
  • 6,200, serving as a significant support level and psychological floor
  • 6,120, representing medium-term support
• Resistance Levels:
  • A near-term resistance zone between 6,508 and 6,530
  • 6,640, a short-term target if bullish momentum picks up
  • 6,930 to 7,220, marking longer-term bullish price targets

RSI Analysis suggests a market leaning toward neutral to bullish sentiment. However, a bearish divergence is noted where the RSI trends downward while prices move higher, indicating potential short-term weakening in momentum. Traders should exercise caution with aggressive long positions as momentum may be slowing.

Federal Reserve Rate Decision
The Federal Reserve’s policy announcement on September 17–18 will likely be the defining event of the week. Market participants should anticipate increased volatility around this time as traders react to the rate decision, Chair Powell’s press conference, and updated economic forecasts.

Implications for the Market:

• Lower interest rates tend to support equity valuations, which could be bullish for stocks
• Increased volatility is expected as the market digests the Fed’s messaging and projections

Day-by-Day Trading Strategy

Monday, September 15
Focus on range-bound trading, with attention to support at 6,400 and resistance near 6,508. Consider buying near support levels with tight stop-loss orders. Avoid trading breakouts until a clearer direction emerges.

Tuesday, September 16
Expect heightened volatility influenced by retail sales and industrial production data. Watch the resistance zone between 6,485 and 6,530 closely. Strong economic data could justify breakout trades above 6,530, while weaker data may call for fading rallies.

Wednesday, September 17
High volatility is anticipated due to the Federal Reserve rate announcement. Avoid trading until after 2 PM ET when the decision and Chair Powell’s remarks are public. If the Fed adopts a dovish stance, the S&P 500’s 2025 price target could extend to approximately 6,970, based on technical extensions from earlier in the year.

Thursday, September 18
Market movement will reflect follow-through from the Fed decision. Monitor resistance at 6,640 and the pivot level around 6,508. Positive market reactions may provide opportunities to ride upward momentum, whereas signs of profit-taking require caution.

Friday, September 19
The focus shifts to position management and consolidation. The 6,508 to 6,530 zone will serve as a pivot area. Light trading is advisable, with consideration given to closing out weekly positions or implementing hedges in preparation for the following week.

This strategy combines technical levels with anticipated market reactions to key economic events, aiming to navigate the S&P 500’s movements thoughtfully during a pivotal week.

Nasdaq 100 Index Analysis and Key Technical Levels for the Week

The Nasdaq 100 Index has maintained its upward trajectory, yet there are signs of consolidation emerging. This pattern is characterized by selling pressure increasing as the index approaches its historic highs, potentially limiting further gains in the short term.

As of the close on September 12, 2025, the Nasdaq 100 stood at 24,092.19, supported by several technical indicators signaling strong bullish momentum. The Relative Strength Index (RSI) at 65.79 indicates upward momentum but suggests the index is nearing overbought conditions. The Moving Average Convergence Divergence (MACD) remains positive, reinforcing a buy signal. The Average Directional Index (ADX) at 38.06 confirms a strong trend is in place.

Additional momentum indicators include the Stochastic Oscillator, which is at 99.82, showing overbought status; the Commodity Channel Index (CCI) at 102.14 and the Ultimate Oscillator at 62.01, both endorsing buying conditions. Bull/Bear Power also supports a bullish stance at 131.51. Meanwhile, the Average True Range (ATR) is relatively low at 61.50, indicating subdued volatility.

For the week ahead, investors should monitor critical support and resistance levels derived from multiple pivot point models:

• Support levels are identified at 23,989.50 (S1), 23,974.70 (S2), and 23,962.47 (S3).
• Resistance levels stand at 24,016.53 (R1), 24,028.76 (R2), and 24,043.57 (R3).

Fibonacci pivot points offer additional guidance, with support at 23,974.70, 23,985.02, and 23,991.40, while resistance levels are noted at 24,012.06, 24,018.44, and 24,028.76.

Other significant levels include supports at 23,303, 23,191, and 23,104, with resistance at 23,502, 23,589, and 23,701, and a key pivot point at 23,390.66.

Looking at Fibonacci retracement levels from recent highs and lows, the 38.2% retracement is near 23,035, the 50% retracement is at approximately 22,908, and the 61.8% retracement is around 22,801. These levels will be critical if the index pulls back from its current highs.

The RSI range between 60 and 70 reflects ongoing bullish momentum, but traders should be cautious as it approaches and potentially exceeds 70, a level often associated with overbought conditions.

Technical analysis from Ki-Wealth estimates a 70% to 75% probability of continued upward movement based solely on current indicators, though caution is advised given the proximity to overbought territory.

Nasdaq 100 Index: Daily Technical Chart

Source: Trading View, Ki-Wealth analysis

Nasdaq 100: Day-by-Day Trading Strategy from September 15 to 19

Ki-Wealth presents a comprehensive trading plan for the Nasdaq 100 Index, outlining key market biases, entry points, targets, stop losses, and important considerations for each trading day during the week of September 15 through September 19.

Monday, September 15: Anticipating Bullish Continuation
The market is expected to maintain an upward trend. Traders are advised to look for buying opportunities on price dips near the support zone between 23,974 and 23,989. The primary target is set at 24,043, which corresponds to the Resistance level R3. It is crucial to place stop-loss orders below 23,950 to protect against unexpected downside moves. Technical indicators support this bullish stance, with the Relative Strength Index (RSI) around 66 and a positive Moving Average Convergence Divergence (MACD). Given that Monday often establishes market tone for the week, using tight stop-losses is recommended to manage risk effectively.

Tuesday, September 16: Bullish with Potential for Consolidation
The bias remains bullish, although some sideways movement or consolidation may occur. Traders should consider entering long positions either on a breakout above 24,043 or on a bounce near 24,016. Targets are set in the range of 24,064 to 24,089, while stop-loss levels should be maintained below 24,000. It is important to monitor for signs of weakening momentum, such as MACD divergence or RSI surpassing 70, which may signal overbought conditions. Early resistance tests might warrant partial profit-taking to secure gains.

Wednesday, September 17: Volatility Spike and Mid-Week Reversal Risk
Wednesday introduces the potential for increased volatility and a mid-week reversal. Traders are advised to wait for clear confirmation before committing to trades, either capitalizing on breakouts or breakdowns. The bullish scenario involves buying above 24,089 with a target near 24,150. Conversely, the bearish case involves shorting below 23,974 with an expected target of 23,850. Stop-losses should be set approximately 1% away from the entry price to contain risk. Mid-week activity often includes institutional portfolio adjustments, necessitating nimble and responsive trading.

Thursday, September 18: Positioning Ahead of Triple Witching
As the market approaches Triple Witching day, positioning becomes critical. Buying on dips near 24,016 or breakouts above 24,089 is recommended. Targets extend from 24,200 to 24,250, with stop-losses placed below 24,000. Traders should pay close attention to volume spikes and the volatility index (VIX), as these can indicate heightened market activity. Increased hedging and options-related trades are commonly observed on this day, influencing price dynamics.

Friday, September 19:Triple Witching Day—Expect Elevated Volatility
Triple Witching, the simultaneous expiration of stock options, index options, and futures contracts, typically leads to sharp price swings and surges in trading volume. This day demands a cautious approach. Focus on short-term trading techniques such as scalping and momentum trades, and be alert to opening gaps which can be exploited through gap trading strategies—either fading the gap or following its direction. Reversal setups can be identified by extreme RSI readings coupled with volume spikes. It is strongly advised to avoid holding large positions into the market close to reduce risk from unpredictable moves.

Additional Recommendations for the Week:

• Employ smaller position sizes to mitigate risk during heightened volatility, especially on Triple Witching day.
• Maintain discipline by avoiding emotional decision-making and adhere strictly to stop-loss levels.
• Keep a close watch on relevant news and institutional flow to anticipate sudden market shifts.
• For traders in options and futures, consider closing positions ahead of expiry to avoid the risks associated with expiration-day volatility.

Understanding the significance ofTriple Witchingon September 19 is essential. This event often triggers institutional rebalancing and creates an environment ripe for momentum, scalping, gap, and reversal trading strategies, while making swing trades particularly risky when initiated on this day.

Earnings To Watch This Week

Monday: DGNX, IMMR, PLAY

Tuesday: FERG, NUTX, BNED, FLUX

Wednesday: GIS

Thursday: FDX, LEN, DRI, FDS, RZLT

Friday: None

Top Picks For the Week of September 15, 2025

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