Market Insights: Wednesday, September 10th, 2025

Market Overview

Stocks posted modest gains on Wednesday as cooler-than-expected wholesale inflation data bolstered hopes for imminent rate cuts, while Oracle lit up Wall Street with its best trading day in decades. The S&P 500 and Nasdaq each notched new all-time closing highs, with the S&P rising 0.3% and the Nasdaq inching just above the flatline. The Dow lagged, falling 0.48% amid weakness in non-tech sectors.

Oracle soared over 35% after forecasting massive cloud revenue growth fueled by surging demand from major AI players. CEO Safra Catz noted that the company secured four multibillion-dollar contracts from three separate clients, sparking a $250 billion surge in its market cap. The move reignited AI optimism, helping offset some broader market fatigue ahead of Thursday’s key CPI report.

Producer Price Index (PPI) data released Wednesday showed a surprise month-over-month decline, with wholesale prices falling despite expectations for a 0.3% rise. Year-over-year, the index rose 2.6%, also below forecasts. This marks the first decline in four months and comes as a strong signal that inflationary pressures may be abating, reinforcing expectations for a September rate cut by the Fed.

Political tensions added a layer of uncertainty as former President Trump called on the EU to support sweeping 100% tariffs on India and China, intended to pressure Russia into Ukraine peace talks. Meanwhile, Fed Governor Lisa Cook’s position was solidified after a judge blocked an effort by Trump to remove her, following allegations of mortgage fraud.

Investors now turn to Thursday’s CPI report, which could provide the final cue for a Fed rate move next week. Consensus sees a slightly hotter headline number, though recent data suggests inflation is trending lower. Until the Fed decision, bulls appear firmly in control.

SPY Performance

SPY added 0.29% on Wednesday to close at $652.21, up modestly from its open of $653.62. It traded between a low of $650.63 and a high of $654.55 on average volume of 70.70 million shares. Price briefly pushed to a new intraday high after the weaker PPI print but faded slightly into the close. With SPY still well above the $645 pivot, bulls continue to buy every dip, maintaining control of the trend.

Major Indices Performance

The S&P 500 led the major indices on Wednesday, climbing 0.3% to close at a new all-time high. The Nasdaq followed with a fractional gain of 0.03%, also setting a fresh record. The Russell 2000 slipped 0.25%, while the Dow lagged, falling 0.48% as cyclical and value sectors underperformed. Oracle’s historic rally helped offset weakness in broader tech, while soft PPI data reinforced the bullish case for rate cuts. Defensive sectors were mixed, with traders largely focused on inflation dynamics and upcoming CPI data.

Notable Stock Movements

Nvidia led the Magnificent Seven with a sharp 3.85% gain, snapping its short-term slide and fueling broader AI optimism after Oracle’s bullish guidance. Tesla and Microsoft also finished in the green, while the rest of the group closed lower. Apple extended its post-event slide, and Amazon, Meta, and Google showed mild weakness. The divergence within tech suggests selectivity as traders position ahead of CPI, though Nvidia’s pop suggests appetite for AI remains intact.

Commodity and Cryptocurrency Updates

Crude oil rallied 1.77% to settle at $63.75, reversing earlier weakness as traders reacted to signs of resilient demand. While our model continues to target a move toward $60 later this year, near-term price action remains choppy. Gold was little changed, slipping just 0.03% to $3,680. Bitcoin climbed 2.02% to close above $113,700, breaking its recent lull and tracking equity gains with renewed vigor.

Treasury Yield Information

The 10-year Treasury yield dipped 0.79% to 4.040% following the weaker-than-expected PPI print. The decline reflects easing inflation concerns and rising confidence in a Fed rate cut next week. With yields well below the danger zone of 4.5%, equity markets remain supported. Traders are watching closely: a spike back toward 4.8% or higher could still spark a sharp correction.

Previous Day’s Forecast Analysis

Tuesday’s forecast projected a range of $644.25 to $653.50 for SPY, with a bullish bias favoring upside targets of $653 and $655 if SPY broke above $650. Resistance was expected at $653, $655, and $658, while key support was layered at $647, $644, and $640. The strategy emphasized long trades above $647, with shorts viable only below that threshold. With PPI on deck, volatility was expected, and traders were advised to remain nimble.

Market Performance vs. Forecast

Wednesday’s price action largely validated the forecast. SPY opened at $653.62, briefly surged to a high of $654.55 following the soft PPI data, and closed at $652.21—well within the projected range. The model’s emphasis on $647 as key support held true, as SPY bounced off an intraday low of $650.63. Resistance near $653 was tested but not decisively broken. The bias toward longs proved profitable, particularly on dips above $647, while resistance near $655 capped gains late in the session. Once again, the forecast highlighted the critical levels with precision.

Premarket Analysis Summary

In Wednesday’s premarket analysis posted at 7:00 AM, SPY was trading at $652.25 with a bias level set at $651.95. The outlook called for bullish upside continuation as long as price remained above this key level, with targets at $653.45, $655, and $658. A loss of the bias was seen as a trigger for profit-taking and consolidation, with support at $649 and $646.45. Longs were favored early in the session with caution advised around CPI. The tone was optimistic but cautious, preparing traders for volatility.

Validation of the Analysis

Wednesday’s market adhered closely to the premarket analysis. SPY opened above the bias level and moved toward the first upside target of $653.45 before stalling slightly. A late-session test of the $650 area held, confirming support just below the bias. The projected range and upside levels offered solid trade setups, especially for those targeting $653 early or fading near $655. As expected, the short side was less favorable, with dips being consistently bought. The analysis proved highly reliable, giving traders the confidence to follow the long bias.

Looking Ahead

Thursday’s CPI report is the focal point, offering the final inflation reading before the Fed meets next week. With PPI already showing signs of disinflation, a cooler CPI print could seal the case for a 50 basis point cut. But a surprise to the upside would likely spark volatility and reprice rate expectations. Traders should expect swift reactions to the data and position cautiously into the release. Friday’s University of Michigan sentiment and inflation expectations will also provide insight into consumer psychology.

Market Sentiment and Key Levels

SPY closed at $652.21, comfortably above the $645 support pivot, maintaining bullish momentum. Market sentiment remains tilted to the upside, driven by soft inflation data and growing conviction in rate cuts. Key resistance now sits at $653, $655, $656, and $659. Support levels to monitor are $650, $648, $645, and $640. As long as SPY holds above $647, the bulls are in control. A break above $655 could ignite a push to $660, while a drop below $645 may invite a deeper pullback toward $640. CPI data will determine the next major directional move.

Expected Price Action

Our AI model projects SPY to trade between $647.25 and $658.75 on Thursday. This is actionable intelligence generated by our AI model. The range suggests increased volatility with a directional bias tied closely to CPI. The bulls remain in control, and a break above $655 would likely extend toward $660, confirming the breakout. Should SPY fail at resistance and lose $650 or $647, expect sharp downside toward $645 and $640. Failed breakouts or breakdowns near these levels will be key setups. Traders should anticipate rapid swings and be ready to shift positions quickly as the CPI data hits.

Trading Strategy

Long trades remain favored above $650, with upside targets at $653, $655, and $658. A breakout above $655 sets up a possible run to $660, though traders should trail stops tightly near highs. Short trades become viable on a confirmed break below $647, targeting $645 and $640. CPI volatility could trigger sudden reversals, so traders should reduce size and use protective stops around major events. The VIX closed at 15.35, slightly elevated but still historically low, suggesting some concern ahead of CPI. Flexibility and discipline are critical during high-impact economic days.

Model’s Projected Range

SPY’s projected range for Thursday sits between $647.25 and $658.75, with the Call side dominating in an expanding band that suggests trending price action with periods of intermittent chop. With CPI due out tomorrow there is potential for fireworks in either direction, so trade what you see. Today’s session was pushed to new intraday highs on a weaker-than-expected PPI, which showed inflation falling for the first time in four months. This is positive for rate cuts and the economy, but as has happened repeatedly, the market sold off after making new highs, closing up just 29 basis points at $652.21 and setting a new all-time closing high. A late test of $650 held, and the market reversed earlier losses, solidifying the bull trend. With SPY well above the critical $645 threshold, every dip continues to be bought as rate cuts now appear to be a given, with only the size and timing of the first cut in question. The bulls remain in control of the broader narrative, with stronger-than-average volume today reinforcing market strength. It is likely SPY continues to make new highs before FOMC, though we continue to assign coin-flip odds that FOMC becomes a sell-the-news event. Until then, SPY is likely to drift higher or consolidate sideways before choosing a clearer direction. Overnight, the bulls will defend $650, and during CPI we expect any dip to hold above $647. A failure there opens the door to $645, while a break below that would bring $640 back into play. Until SPY falls to $640 or lower, the bears remain sidelined. Our base case remains a 10 to 15 percent pullback at some point, yet we continue to view any weakness as a buying opportunity until FOMC and recommend buying every dip above $640. CPI days are often volatile, and it would not be surprising to see $10 swings in SPY. With SPY closing at a record high, a run toward $655 is a distinct probability on Thursday. A move to $660 is still required to confirm the breakout, and failure to reach that level would suggest a near-term top, particularly given September’s reputation for negative returns. For Thursday, resistance is at $653, $655, $656, and $659, with support at $650, $648, $645, and $640. Since reclaiming $585, SPY has held a steady uptrend fueled by dip buyers. Today Mag stocks were mixed, perhaps showing early cracks in the megacaps. Until weakness emerges in these leaders, or ETH closes below $4300, prices are likely to grind higher. We continue to favor quick profit taking and caution with overnight holds. The VIX rose 2.06 percent to 15.35, and while September often sees VIX reach 20, contango in VXX futures suggests volatility may drift lower into FOMC. If you have not added protection to your long book, now is the time. VIX below 23 supports the bullish case, but a breakout above it could finally spark the long-anticipated pullback. SPY closed just below the lower bound of the bull trend channel from the April lows, teetering on a line where a red day could signal the start of a downtrend, while a green day would push it back into the current steep, uncorrected bull channel.

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the day in a very narrow Bullish Trending Market State, with SPY closing above MSI resistance turned support. There were no extended targets during the regular session, although the premarket had them overnight and after PPI information was released. Once again SPY reached a new all-time high with the MSI rescaling higher overnight. But the MSI settled into a range until 2 pm and then a series of rescalings lower to a bearish state saw SPY drop to the lows of the day. But the MSI was extremely narrow in each lower rescaling indicating a very weak bear trend. That the MSI was spot on once again as SPY found support at $650 and bounced to close up on the day. For Thursday the MSI is forecasting sideways to very slightly higher prices overnight. But with CPI incoming, it’s highly likely on favorable news there is another push to the all-time high and beyond. MSI support is at $651.82, and lower at $651.52.
Key Levels and Market Movements:
On Tuesday we wrote, “Wednesday brings PPI, which is likely to move the market. A hot number may see SPY sell off, while a cool number is likely to send it sharply higher,” and noted, “We expect some upward drift overnight,” while also stating, “Our bias remains to buy on dips while also considering short setups on failed breakouts near the all-time highs.” With that context, and with the MSI opening in a Bullish Trending Market State with SPY well above the all-time highs and nearing a premarket resistance level, we waited for a chance to go short after a textbook failed breakout following PPI. That opportunity came at 10:30 when SPY set up a second, less-than-perfect failed breakout, and we entered short at $653.95. We set our first target at MSI support at $651.80, and while it took time to get there, the market, as it has done repeatedly after new highs, sold off and reached T1 just after 2 PM. We then set T2 at MSI support at $650, but the MSI began a series of narrow rescalings lower, so we knew SPY would struggle to reach the level. We held until the MSI rescaled again and exited at MSI support at $651 for our second target. With a stop at breakeven, we left a small trailer, but as expected SPY did little more to test lower levels. Late in the day SPY set up a failed breakdown, so we closed our short and called it a day. SPY bounced and recovered half of its decline, but we were in profit protection mode and happy with a one-and-done, solid trade, once again thanks to a clear plan, disciplined execution, and strong alignment between MSI signals, our broader market model, and key technical levels. The MSI continues to be a cornerstone of our consistent trading process.
Trading Strategy Based on MSI:
Thursday brings CPI, which is very likely to move the market. A hot number may see SPY sell off, while a cool number is likely to send it to new all-time highs. We expect more sideways action than bullish drift overnight, with the bulls defending $650 to keep the bull trend intact. A move below $650 could open the door to lower prices, but we view this as a low probability and expect dips to be bought once again. The bulls remain in control until the bears push price below $640, and it is likely we continue to see new all-time highs before FOMC on the 17th. Our bias remains to buy on dips while also considering short setups on failed breakouts near the all-time highs or on a break below $645. As always, failed moves remain among the highest-probability setups. Stay nimble, avoid trades during Ranging Market States, and ensure full alignment with MSI. Providing real-time insights into market control, momentum shifts, and actionable levels, the MSI when integrated with our Pre-Market and Post-Market Reports continues to sharpen execution precision and elevate trade quality. If you haven’t yet integrated MSI and our model levels into your process, now is the time. Contact your representative to get started as these tools are designed to support consistency and enhance performance.

Dealer Positioning Analysis

Summary of Current Dealer Positioning:
Dealers are selling SPY $653 to $665 and higher strike Calls implying the Dealers belief that prices may rise on Thursday, to perhaps a new all-time high. The ceiling for tomorrow appears to be $655. To the downside, Dealers are buying $652 to $595 and lower strike Puts in a 3:1 ratio to the Calls they’re selling displaying little concern that prices could move lower tomorrow. Dealer positioning is unchanged from slightly bearish/neutral to slightly bearish/neutral.
Looking Ahead to Friday:
Dealers are selling SPY $653 to $665 and higher strike Calls indicating the Dealers belief that prices may rally this week but likely stop near current levels. There is a chance that SPY reaches $660 which would represent the ceiling for the week. To the downside, Dealers are buying $652 to $540 and lower strike Puts in a 4:1 ratio to the Calls they’re selling, reflecting a bearish outlook for the week. For the week Dealer positioning is unchanged from bearish to bearish but slightly less so. We advise reviewing Dealer positioning daily for directional clues. These positions evolve quickly and tracking them is essential for staying ahead of shifting market sentiment.

Recommendation for Traders

With SPY continuing to close above $650, the bulls retain complete control. Long trades remain favored above $650, targeting $653 and $655, with a potential extension to $658 and $660. Short setups are best reserved for a confirmed break below $648, with downside targets at $645 and $640 or on failed breakouts above the all time highs. CPI data will be a key catalyst, so traders should manage risk aggressively, especially around the 8:30 AM release. VIX at 15.35 suggests mild concern, and larger moves are possible. Use tighter stops, trade smaller, and avoid overexposure around key economic events. Be prepared to reverse positions if a breakout fails. Remember to review the premarket analysis posted before 9 AM ET to account for any changes in our model’s outlook and in Dealer Positioning.

Good luck and good trading!