Weekly Market Update (Sep 21, 2025)

Market Hedwig
Sep 21
2 min read

HIGHLIGHTS

S&P increased slightly after a 25bps rate cut. Markets expect 2 more rate cuts this year. Time to think about the positioning after Fed cut.

FOMC: Fed cut rate by 25bps and hinted another rate cut is likely in October. The median dot plot shows 3 cuts this year. Its statement included dovish language, such as “job gains have slowed”, “unemployment rate has edged up but remains low”, similar to those used in September 2024 when Fed started the first of three consecutive cuts.

China: Chinese export growth is solid despite US tariffs. The increasing competition in tech goods, and slowing domestic demand in China could raise concerns that there would be spillover from overcapacity. It could create headwinds for global manufacturing.

UK: Bank of England holds rates as expected. Potential cut in February. Although there are compelling reasons for rate to drop more than priced, the increased inflation and hawkish commentary have lowered the likelihood of a cut in November.

MARKETS

Nasdaq	22,631.48	+2.21%
S&P 500	6,664.36	+1.22%
Dow	46,315.27	+1.05%
10-Year	4.14%	+8bps
Brent	66.04	-1.24%
DXY	97.65	+0.10%

*Data as of market close. 5-day change ending on Friday.

VIEW FROM THE STREET

Equity

UBS: Stocks lifted this week, mainly driven by the 25bps rate cut and major headlines in tech stocks. NVIDIA announced that they will invest US$5 billion in Intel and the 2 companies will co-develop chips for PCs and data centers.

Standard Chartered: We suggest to rotate excessive US equity exposure into Asia ex-Japan (AeJ) equities. Also add US tech stocks whenever there is pullback. AeJ equities can potentially benefit from weak USD environment.

Fixed Income

Morgan Stanley: Long-end yields have dropped about 30bps in the last 3 weeks. Investors may be hedging the weakening job market risk instead of fearing inflation. We see term premium remains in near term as US debt and deficits are at a historical extreme. Yield curve steepening will likely to continue.

J.P. Morgan: Long term yields will increase due to rate cut as it will increase the concerns over inflation and Fed independence. We recommend real assets like infrastructure and diversifying globally to hedge against economic slowdown and inflation.

Economy

Morgan Stanley: Markets expect rates will drop to accommodate job market softening while without triggering much inflation. Markets are taking bad economic data as good because bad data support further rate cuts.

UBS: Consumer spending remains resilient, supporting the health of the US economy. It provides a buffer against recession risk. Retail sales has increased for 3 consecutive months.

KNOWLEDGE TRANSFER

GLP-1

Here's all you need to know about the Game-Changing Obesity Drugs.

DISCLOSURE

This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.