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We see new record closing levels for the S&P 500 and the Nasdaq again today. Investors bought into the September-meeting Fed minutes, correctly anticipating the Fed is likely to make two more 25 basis-point (bps) cuts at the final two meetings of 2025. The S&P 500 gained +38 points, +0.58%, to finish at 6,753 for the first time ever. The Nasdaq surged past the field, +255 points on the session, +1.12%, to 23,043.

The blue-chip Dow was flat on the day (officially -0.003%) but the small-cap Russell 2000 joined the rally, +25 points, +1.04%, to 2,483 — a smidge below an all-time closing high of its own set on Monday of this week. Meanwhile, gold is at a record high $4038.99 per troy ounce today, a hedge against the robust AI trade in the equities market.

Fed Minutes Give Investors Reason to Buy  
 

Even though it may not seem like it, market participants weren’t exactly sure whether we’d see additional rate cuts into the end of the year, but today’s release of the September Fed minutes put that to rest. A majority of the Federal Open Market Committee (FOMC) called for two more 25 bps cuts — one at the October meeting at the end of this month and one in mid-December. Among voting members, 11 of 12 voted for a 25 bps cut, while the sole detractor wanted +50 bps cut.

As the Fed attempts to alleviate some of the strain on the labor market by softening rates, we note a distinct shift in priorities from the Fed. No longer is inflation the main issue — even though they were unable to bring the Inflation Rate down to the desired 2.0% (2.3% in April was the closest we got) — it’s the labor market, which has seen the number of jobs filled per month shrink in monthly data.

Unfortunately, the reports carrying this data is won’t be forthcoming until the shutdown ends. If the shutdown lasts until the September 28-29 FOMC meeting, the Fed will be forced to make decisions explicitly not from jobs and inflation data. This goes for BLS employment numbers and Weekly Jobless Claims from last week, and would also be the same for Consumer Price Index (CPI) and Producer Price Index (PPI) due out next week.

What to Expect from the Stock Market Tomorrow
 

As we just noted, don’t expect those Weekly Jobless Claims to come out Thursday morning, which will make it the second-straight week without these numbers. It had become a more volatile set of data to behold, with multi-year high initial claims one week and sub-mean trends a couple weeks later. We know from the monthly data that jobs overall are dwindling, but even there we only have data up through August.

Delta Air Lines (DAL - Free Report) will effectively kick off Q3 earnings season tomorrow ahead of the opening bell, with modest growth expectations on both top and bottom lines. The major airline looks to build on its string of three-straight positive earnings surprises, which have a trailing four-quarter average beat of nearly +5%. Shares of DAL were up today, but still -5.5% year to date.

Zacks Rank #2 (Buy) stocks PepsiCo (PEP - Free Report) and Levi Strauss (LEVI - Free Report) also report Thursday morning. While Pepsi is expected to post a -1.73% loss on earnings year over year and +2.4% revenue growth, Levi’s expects a -6% earnings drop from a year ago and -1% on revenues — likely a sign of tariff vulnerability.

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