Market Update: 12th September 2025- The Fed’s Big Moment Is Almost Here

If markets were a soap opera, this week has been full of cliff-hangers. Stocks have been climbing, oil has been sulking, and everyone’s waiting for the big reveal from the Federal Reserve next week. The question is simple: will the Fed cut rates and just as importantly what will they say about what comes next?

What’s Happening Right Now

Wall Street has been in good spirits, dragging Asian and European markets along for the ride. Hopes of cheaper money have put a spring in investors’ steps. Japan’s Nikkei has been especially lively, thanks to its tech and AI darlings, while European indices are quietly tagging along despite their own growth worries.

In the U.S., the story is more of a balancing act. Inflation ticked up to 2.9% in August not exactly what the Fed wanted to see. At the same time, jobless claims rose, hinting the labour market is losing a bit of puff. So, the Fed finds itself in the classic dilemma: cut rates to support jobs and risk stoking inflation or stay tight and risk cooling the economy further. Either way, someone’s not going to be happy.

Commodities are telling their own tale. Oil prices slipped as supply is expected to outpace demand. That’s good news for motorists, not so great for energy stocks.

What to Watch Next Week

The main event is Wednesday’s Fed meeting. A quarter-point cut is widely expected markets have already banked it. But the real drama is what Jerome Powell says afterwards. Will he hint at more cuts ahead, or play it cautious and remind us that inflation hasn’t been tamed yet?

Final Thoughts

Next week’s Fed meeting is the big set piece but remember: the cut itself isn’t the whole story. It’s the path beyond it that matters. Are we in for a series of trims, or is this a one-and-done job?
For now, markets are cheerful maybe a little too cheerful. As always, it pays to enjoy the ride but keep your seatbelt fastened. The road ahead could still be bumpy.

Anyway, till next time, all of you trade safe!

By James Trescothick
Head of Market Research and Market Analysis

Risk Disclaimer: This information is for educational purposes only and does not constitute investment advice. Financial markets involve risks, and past performance is not indicative of future results. Always conduct your own research and seek professional advice before making investment decisions.