Market Insights: Thursday, September 18th, 2025

Market Overview

US stocks closed at fresh all-time highs on Thursday as investors celebrated a rate cut from the Federal Reserve and a surprise $5 billion investment by Nvidia into chipmaker Intel. The S&P 500 climbed 0.47%, the Nasdaq surged 0.94%, and the Dow added 0.27%, with all three major indices notching record closes. The Russell 2000 outperformed with a 2.56% gain, reaching a new all-time high as small caps roared back to life.

Nvidia’s backing of Intel sent shares of the struggling chipmaker up 22%, fueling broader enthusiasm for the semiconductor space. The investment was viewed as both a lifeline and a strategic play to stabilize the domestic chip supply chain. Meanwhile, investors continued to digest Wednesday’s 25 basis point rate cut from the Fed. While Chair Jerome Powell acknowledged that inflation remains elevated, he emphasized the growing risks of a weakening labor market, noting that there is “no risk-free path” forward. The Fed’s dot plot signaled two additional rate cuts this year, easing monetary conditions into year-end.

Weekly jobless claims fell modestly, but hiring remained soft, underscoring the Fed’s policy pivot. In corporate news, attention turned to FedEx, set to report earnings after the bell. Analysts expect the delivery giant to take a hit from the White House’s decision to revoke the “de minimis” tariff exemption on low-value direct-to-consumer shipments from China and Hong Kong. President Trump, currently visiting the UK, dined with tech and finance leaders at Windsor Castle. Investors are now eyeing Friday’s scheduled call between Trump and Chinese President Xi Jinping, where discussions around TikTok and broader trade issues are expected.

SPY Performance

SPY gained 0.47% to close at $662.31, logging a new all-time high after opening at $661.93 and tagging an intraday high of $664.88. The ETF dipped to $660.27 early before finding buyers and resuming its climb. Volume was strong at 85.25 million shares, above average and reflective of strong participation in the post-Fed rally. The day’s action confirmed breakout continuation, with bulls reclaiming and holding key resistance levels. SPY has now posted three consecutive higher closes, and each dip continues to be absorbed aggressively.

Major Indices Performance

The Nasdaq led with a 0.94% gain, bolstered by Nvidia’s strong showing and renewed interest in semiconductors. The S&P 500 added 0.47% and extended its breakout above the 6600 mark. The Dow advanced 0.27%, continuing its steady climb despite being less tech-heavy. The Russell 2000 soared 2.56%, suggesting a broadening of the rally and increased appetite for smaller-cap names. Thursday’s action reflected widespread strength, with risk appetite clearly intact across sectors and market caps.

Notable Stock Movements

It was a mostly red day for the Magnificent Seven, with Nvidia the standout exception, jumping 3.49% on news of its investment in Intel. Meta and Alphabet also managed modest gains, while Apple, Microsoft, Tesla, and Amazon traded lower. Intel surged 22%, dominating headlines and lifting sentiment across the chip space. FedEx shares were volatile ahead of earnings, with concerns mounting over tariff changes. Nvidia’s move was widely interpreted as a long-term strategic play to solidify US chip production, and the market responded accordingly.

Commodity and Cryptocurrency Updates

Crude oil dipped 0.55% to settle at $63.70, continuing its slow move toward the model’s $60 target. Gold fell 1.04% to $3,679, pulling back as investors favored risk assets. Bitcoin rallied 1.59% to close above $117,400, continuing to benefit from macro tailwinds and favorable liquidity conditions. While commodity markets remain range-bound, crypto strength suggests underlying optimism about financial conditions and the broader risk environment.

Treasury Yield Information

The 10-year Treasury yield rose 0.93% to close at 4.115%, still well below the critical 4.5% level. The move reflects a measured response to the Fed’s policy shift and economic data, with bond markets showing no signs of panic. Should yields climb above 4.8%, equity markets would likely begin to wobble, and a move above 5% would almost certainly trigger a significant correction. For now, yields remain supportive of the equity rally, as the Fed’s dovish stance continues to anchor expectations.

Previous Day’s Forecast Analysis

Wednesday’s forecast projected SPY would trade between $651.25 and $666.25, with a bullish bias above $657. The model highlighted upside targets at $661, $665, and $666, while noting support at $657, $655, and $650. The premarket roadmap emphasized the importance of holding $657 overnight and suggested any break above $661 could trigger follow-through. With no major data releases, the session was expected to reflect post-Fed digestion and renewed momentum.

Market Performance vs. Forecast

Thursday’s session aligned well with the forecast. SPY opened near the previous day’s close, dipped slightly to $660.27, then pushed higher to $664.88 before pulling back modestly. Price respected key levels throughout the day, with $661 and $665 both acting as magnets for intraday flows. The projected range captured the day’s action cleanly, and the model’s bullish bias above $657 was fully validated. Thursday marked another session where directional and level precision delivered actionable results.

Premarket Analysis Summary

Thursday’s premarket notes, published at 8:19 AM, set the bias level at $664.10 and listed stretch targets above at $665 and $666, with support below at $661, $659.10, and $656. The model noted the overnight move had captured much of the upside and expected consolidation or a pullback into the open. If the $664.10 level could be reclaimed intraday, a continued push higher was likely. Otherwise, a retracement to lower levels was favored, with guidance to take profits on any downside moves.

Validation of the Analysis

The premarket forecast proved highly effective. SPY rallied overnight, touched the $665 area premarket, then opened below the bias level at $661.93. It managed to push above $664.10 intraday but struggled to hold the level, fading late to close at $662.31. Key targets at $661 and $664 were reached, and buyers again defended dips near support. The roadmap provided a clear framework for day traders to manage both trend continuation and mean reversion opportunities with precision.

Looking Ahead

Friday has no scheduled economic news, which could open the door to a quiet session or trending continuation, depending on overnight developments. Traders will be watching closely for updates on the expected Trump-Xi call, especially if new details emerge around TikTok or trade relations. SPY has cleared key resistance levels and posted back-to-back record closes, suggesting further upside is likely unless geopolitical surprises derail sentiment.

Market Sentiment and Key Levels

SPY closed at $662.31, firmly above the breakout level of $660. Key support now sits at $659, $656, $652, and $647. Resistance is layered above at $663, $665, and $670. Bulls remain in control above $645, and the broader trend continues to favor higher prices. Unless SPY breaks down to $640 or below, any weakness remains a buying opportunity, particularly with tech leadership still largely intact.

Expected Price Action

Our AI model projects SPY to trade between $658 and $667 on Friday. With no news expected, the market may enter digestion mode, but strong bullish momentum and supportive dealer flows suggest an upward drift remains likely. A break above $665 would confirm continuation, while support at $660 and $657 should be defended. Below that, $652 and $647 become downside targets. Trend remains firmly intact, though the risk of chop is growing into Friday’s expiration.

Trading Strategy

Long trades remain favored above $657, with upside targets at $663, $665, and $670. Shorts may be taken on failed breakouts above $665 or confirmed rejections at intraday resistance. The bias remains to the upside, and any weakness into $657 or below could provide dip-buying opportunities. As always, reduce size into Friday expiration and remain cautious with overnight exposure. The VIX fell slightly to 15.70, reinforcing the low-volatility environment and supporting the bull case into quarter-end.

Model’s Projected Range

SPY’s projected range for Friday sits between $656 and $669, with the Call side dominating in a narrowing band that suggests trending price action with intermittent periods of chop. There is no news due on Friday. SPY once again posted a new all-time closing and intraday high, following through on yesterday’s rally. Weakness continues to be bought, with SPY now closing above the breakout confirmation level of $660. As a result, prices are likely to continue moving higher into the fourth quarter. Overnight, the market moved sharply higher on Fed rate cut expectations, reaching $665 before selling off into the open. The dip was bought again, and SPY retested the overnight highs, but they failed to hold and price retraced into the close, still managing another record finish at $662.26. Volume was higher than average, and with SPY well above the critical $645 threshold and every dip being bought, the bulls remain in complete control of the broader narrative. Overnight, the bulls will defend $656, which must fail for price to move lower. A failure there opens the door to $652, while a break below that would bring $647 into play. Until SPY falls to $640 or lower, however, the bears remain sidelined. Our base case for a 10 to 15 percent pullback this year has weakened but remains on the table. We continue to view any weakness as a buying opportunity and recommend buying every dip above $645. For Friday, resistance is at $663, $665, and $670, with support at $659, $656, $652, and $647. Since reclaiming $585, SPY has held a steady uptrend fueled by dip buyers. Today Mag stocks were mixed, with more than half declining. Until consistent weakness emerges in these leaders, or ETH closes below $4300, the market is likely to grind higher. We continue to favor quick profit taking and caution with overnight holds. The VIX fell 0.13% to 15.70, and while September often sees VIX reach 20, contango in VXX futures suggests volatility may drift lower. 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 firmly within a redrawn bull trend channel from the April lows, as the model continues to see higher odds of a continuation of the bull trend than a pending selloff.

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the day in a Bullish Trending Market State, with SPY closing mid-range. Extended targets printed overnight and for much of the morning session. The MSI rescaled higher overnight to a bullish state and began printing extended targets which took SPY to record highs once again. For Friday, given its OPEX it’s likely to be a messy Friday. The MSI is implying strength and a move higher on Friday, but it would not surprise us to see move chop and two-way trading. MSI support is $661.25 with resistance at $663.50.
Key Levels and Market Movements:
On Wednesday we wrote, “We continue to favor buying dips as it is likely the market grinds higher into Friday,” and noted, “The bulls will defend $657 overnight, which should be treated as a buying opportunity. Above this level we favor buying dips, while below it we would consider shorts,” while also stating, “We will also look for short setups on failed breakouts above today’s high.” With that context, and with the MSI rescaling higher overnight with extended targets and SPY opening on MSI support, we looked for a long opportunity to ride the wave toward the day’s highs. That came early at 9:48 AM on a textbook failed breakdown right at MSI support. We entered long at $660.90 and set T1 at MSI resistance at $663.50. Once T1 was reached, we set T2 at the premarket level of $664.10, which also came quickly. With a stop moved to breakeven, we trailed the remaining 10 percent looking for a retest of the overnight highs. While we came close, SPY didn’t quite reach them, so we exited T3 at $664.30 and locked in the profits. We had wanted a short as well, but with extended targets printing we weren’t going to get caught in that trap. By 1 PM we concluded the market was too strong and there wasn’t a clean setup worth risking our gains. We closed shop for the day, one and done, thanks again 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:
Friday has no scheduled news, but with OPEX in play we are likely to see messy two-way trading that favors the long side. We continue to favor buying dips. The bulls want to defend $660, with SPY moving no lower than $657 overnight. Either dip should be treated as a buying opportunity. We will consider shorts below $657 and on failed breakouts above today’s high. Even if $657 fails, the bears will only come to life on a drop below $640. As such, it remains likely we continue to see new all-time highs, and our bias stays to buy on dips. 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 $663 to $690 and higher strike Calls while also selling $662 to $660 Puts implying the Dealers belief that prices have nowhere to go but up on Friday, or at least, won’t drop below $660. Dealers only sell ATM Puts when they are convinced of higher prices. The ceiling for tomorrow appears to be $670. To the downside, Dealers are buying $659 to $600 and lower strike Puts in a 3:1 ratio to the Calls/Puts 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 Next Friday:
Dealers are selling SPY $663 to $690 and higher strike Calls implying the Dealers belief that prices will likely slow their ascent around current levels. The ceiling for the week appears to be $670. To the downside, Dealers are buying $662 to $540 and lower strike Puts in a 4:1 ratio to the Calls they’re selling, reflecting a bearish outlook for the week. This is likely more hedging than a bearish prediction. For the week Dealer positioning is unchanged from bearish to bearish, 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

SPY closed at $662.31, confirming its breakout and continuing the bull trend. Long trades remain favored above $657, targeting $665 and $670. Shorts may be taken on failed breakouts or weakness below $657. Continue to rely on model and MSI levels, and be cautious heading into weekend positioning. Bulls remain in full control, and every dip is a potential opportunity.

Good luck and good trading!