The sky is the limit
The past week looked very much like the hysterical phase of a rally. This is the point where the upswing is nearing its end, while investors, blinded by profits, lose their fear and start buying everything in sight – including outright “junk”. Indexes keep climbing to fresh highs, and they are doing so at an ever-faster pace.
All major U.S. indexes rose more than 1% last week – for the first time since late June. The tech-heavy NASDAQ Composite jumped over 2% (+2.21%). Gains have now been recorded in 10 of the past 13 weeks. Unsurprisingly, all three leading indexes closed the week at all-time highs.
A new impulse came from last Wednesday’s meeting of the Federal Reserve’s Open Market Committee (FOMC). The Fed cut its rate by 0.25% – the first reduction since last December. This lifted investor sentiment, with many interpreting it as the start of a new phase of monetary easing.
President Trump also cheered markets after reportedly holding a productive call with China’s President Xi Jinping – once again pushing the trade war into the background.
Adding fuel to the fire, hype around artificial intelligence surged after Oracle (ORCL) reported strong quarterly results and presented impressive forecasts for the AI market.
By the end of the week, another surprise arrived for fans of “Intel Inside”. Intel (INTC), which had been struggling for years, received a double boost: support from the U.S. government and a $5 billion investment from chipmaking leader Nvidia (NVDA). Unsurprisingly, Intel shares skyrocketed, becoming the top performer in the S&P 500 with a weekly gain of over 20%.
In short, last week was a celebration of big tech – and not only “big” “tech”, but also mid-sized and even small “tech”. Anything connected with modern technology and, above all, artificial intelligence was in demand. Gains spread beyond U.S. companies to European, Japanese and, of course, Chinese stocks. Japan’s Nikkei 225 hit a record high above 45,000 points, while China’s Shanghai Composite reached 3,800 points for the first time since 2015. In other words, everyone’s enjoying the party.
ITS indexes joined the rally as well, pushing to fresh records almost daily and approaching the psychologically important 1,500 mark. The standout was the ITS Shariah Index (ITSS), which closed lower on only four sessions in September and advanced more than 7% over the month.
Investors are happy – that much is clear. But the higher markets climb, the louder the talk of overheating and bubbles. And this should not be ignored. Even if no obvious risks are in sight, every prudent investor should think about reducing portfolio exposure. After all, we know full well: markets, like trees, do not grow to the sky.
Market outlook for 22 September 2025
The coming week promises to be busy and filled with a wide range of news and events.
After the FOMC meeting, Federal Reserve members are finally free to “open their mouths” and share views on the current situation – which they will no doubt do with enthusiasm. Practically every day this week one or another Fed official is scheduled to speak at various events. On Tuesday, Jerome Powell will deliver a speech at the Greater Providence Chamber of Commerce dinner in Warwick, Rhode Island, dedicated to the economic outlook for 2025. His remarks will, without question, be closely followed by all market participants.
At first glance, the upcoming macroeconomic data may not appear extensive – mostly housing market statistics. However, Friday will bring a critical release: the Personal Consumption Expenditures (PCE) index, the Fed’s key inflation gauge.
The earnings season is still on pause, but there will still be important updates. On Tuesday, 23 September, one of the industry’s brightest stars – chipmaker Micron Technology (MU) – will publish its results. Expectations are sky-high, especially after Broadcom and Oracle’s strong reports, but whether Micron can deliver will only be revealed after Tuesday’s market close.
That is the setup for the coming week. There will be no shortage of action, though hopefully not too many reasons for excessive worry. The week has started on a moderately negative note, with all major global indexes in the red on Monday. Losses were limited, however, with declines not exceeding half a percent.
It is worth remembering that Mondays are usually uneventful and rarely set the tone for investor sentiment. The main events will come on Tuesday, with Powell’s speech and Micron’s earnings. Until then, the market waits, hoping the rally continues and rewards investors with fresh gains.