Market Insights: Wednesday, September 24th, 2025
Market Overview
US stocks slipped for a second day on Wednesday as investor optimism faded in the face of mixed signals from Federal Reserve officials and persistent uncertainty surrounding the path of interest rates. The S&P 500 declined 0.30%, the Nasdaq lost 0.34%, and the Dow shed 0.37%, marking another pullback as traders weighed conflicting commentary on future policy direction.
Fed Chair Jerome Powell reiterated in remarks Tuesday that the central bank would proceed cautiously on further rate cuts and noted that equities appear “fairly highly valued,” reinforcing a more measured tone. Meanwhile, other Fed officials hinted at growing disagreement over the need for additional easing, citing signs of weakness in the labor market as justification for a potential policy shift. The divergence in Fed messaging left markets on edge, with investors increasingly looking to Friday’s PCE inflation report for clarity on the direction of monetary policy.
Despite the broader weakness, some tech names managed to rally. Tesla rose 4% and closed near its 2025 highs after analysts at Mizuho Securities raised their price target to $450, citing muted tariff risks and growing optimism around the company’s robotaxi rollout. Alibaba surged 8% after announcing plans to increase its AI investment beyond its previous $50 billion target, part of a broader push to keep pace as global AI spending accelerates toward $4 trillion. Micron, however, saw its shares fall despite a stronger-than-expected earnings report that initially signaled strength in AI-related demand.
New economic data added a wrinkle to the rate debate. The Commerce Department reported a surprise jump in new home sales for August, as easing mortgage rates brought buyers back into the market. Nonetheless, affordability remains a key concern. With two red sessions now on the books, market participants are watching Thursday’s GDP and unemployment claims data closely ahead of Friday’s pivotal inflation release.
SPY Performance
SPY slipped 0.33% to close at $661.03 after opening at $664.49 and trading between $664.61 and $659.67 throughout the session. Volume was average at 62.34 million shares. The ETF saw early weakness followed by a midday bounce off support at $660, but buyers lacked conviction to reclaim higher levels, and the session ended near the lower third of the range. The two-day pullback has been modest, with bulls still holding key support, but momentum has clearly slowed as traders await further macro clarity.
Major Indices Performance
The Dow led the market lower with a 0.37% decline, followed by the Nasdaq at -0.34% and the S&P 500 at -0.30%. The Russell 2000 underperformed, falling 0.92% and signaling weakness in small caps. The Magnificent Seven traded mixed, with Tesla, Meta, and Microsoft in the green, while the remaining members posted declines. After three days of record closes earlier this week, indices appear to be digesting gains and reassessing assumptions heading into the final stretch of the quarter.
Notable Stock Movements
Tesla led large-cap gains, rallying 4.01% following bullish commentary from Mizuho Securities. Meta and Microsoft also closed higher, but the rest of the Magnificent Seven saw continued selling pressure, contributing to the broader Nasdaq decline. Alibaba soared 8% after unveiling expanded AI investment plans, while Micron fell despite beating estimates as traders took profits following the print. Sector rotation remains in play, with buyers showing selectivity as macro uncertainty creeps back into the narrative.
Commodity and Cryptocurrency Updates
Crude oil rose 2.26% to settle at $64.84, continuing its rebound despite broader market weakness. Our model still forecasts a move toward $60 by year-end. Gold dropped 1.37% to $3,763, snapping its recent rally as inflation expectations held steady. Bitcoin bucked the risk-off trend, climbing 1.38% to close above $113,500, showing resilience even as equities and gold slipped. Crypto strength is noteworthy, but further confirmation is needed before calling a trend shift.
Treasury Yield Information
The 10-year Treasury yield rose 0.68% to finish at 4.148%, staying below the 4.5% threshold that would pressure equities more meaningfully. While yields remain elevated, they have yet to trigger widespread de-risking. A move above 4.8% would likely weigh more heavily on risk assets, and a breach of 5% could begin the kind of drawdown the market has thus far avoided. Traders continue to monitor the yield curve closely heading into Thursday’s economic data.
Previous Day’s Forecast Analysis
Tuesday’s forecast projected a range of $663 to $671, calling for continuation if $663 held and a more neutral outlook if that level broke. Resistance was listed at $667 and $670, with support at $661 and $657. The roadmap anticipated two-way action and noted that caution was warranted given Powell’s remarks and softening sentiment.
Market Performance vs. Forecast
Wednesday’s session respected model levels cleanly. SPY opened at $664.49, briefly tested resistance at $664.61, and then pulled back to test support at $659.67 before bouncing to close at $661.03. Support at $661 and $660 acted as firm footing, while the failure to reclaim $663 confirmed fading momentum. The model’s warning for choppy price action played out with precision.
Premarket Analysis Summary
Wednesday’s premarket report, issued at 8:06 AM, set the bias level at $664.50, with targets above at $665 and $666.50, and support below at $663, $661.50, and $657.50. The model favored consolidation unless $664.50 was cleanly reclaimed and warned that any advance above that level might stall quickly. The report emphasized caution on breakouts and a preference for trading downside levels if bias was not captured.
Validation of the Analysis
The session followed the roadmap exactly. SPY opened near the bias level, briefly poked above to $664.61, then rejected sharply and slid to test multiple downside targets. Support held near $660, aligning with both model and MSI levels. The weak rally into the close failed to reclaim the bias level, confirming the expected choppy consolidation. Traders who followed the roadmap had clean short setups and low-risk levels to manage entries and exits.
Looking Ahead
Thursday brings the week’s first major data releases with GDP and unemployment claims due before the open. The market remains on edge heading into Friday’s PCE report, with rate expectations now more uncertain following Powell’s comments. Traders should prepare for increased volatility and two-sided price action, with opportunities likely tied to reactions around economic data. Nvidia, Tesla, and Apple remain key watchlist names, along with gold and crypto for signals of broader sentiment.
Market Sentiment and Key Levels
SPY closed at $661.03, holding just above the $660 pivot and still well above critical trend levels. Support sits at $660, $655, $653, and $650. Resistance stands at $662, $665, $667, and $670. Bulls need to reclaim $663 to regain control. A failure at $660 could invite a quick move to $655 and test the lower bull trend channel from the April lows. While the trend remains intact, the market is at a critical juncture.
Expected Price Action
Our model projects SPY to trade between $658 and $665 on Thursday. Resistance is layered at $662, $665, $667, and $670. Support sits at $660, $655, $653, and $650. The dominant Put side suggests chop with intermittent directional moves. GDP and unemployment claims may provide the spark for either breakout or breakdown. Traders should remain nimble, with $660 as the key pivot. Above $663 favors retesting highs; below $655, watch for a broader reset.
Trading Strategy
Long setups are favored above $660, with targets at $662, $665, and $667. Shorts become viable below $660 or on failed breakouts near $665 or $667. The VIX dipped 2.76% to 16.18, but the curve has flattened, signaling potential for rising volatility. With the PCE report looming, traders should tighten risk and reduce overnight exposure. We continue to favor quick profits and tight stops, especially in the face of increasingly two-way action.
Model’s Projected Range
SPY’s projected range for Thursday sits between $655.75 and $666.25, with the Put side dominating in a narrow band that suggests choppy action with intermittent trending periods. GDP and Unemployment Claims are due tomorrow and may move the market. SPY notched a rare two-day selloff, though with only a 32 basis point decline and prices holding above $660, the broader bull trend remains intact. Overnight, the market drifted higher to test $665 before coming under pressure at the open. A steep morning selloff led to a test of $660, which held with buyers stepping in and producing a bounce into the close. With SPY still above $660, prices are likely to resume their uptrend on Thursday. Volume was average, but with SPY well above the critical $645 threshold and dips consistently being bought, bulls remain in control of the broader narrative. That said, bears have the ball in the near term, and bulls need to reclaim $663 to retake full control, which is likely to happen overnight or Thursday as SPY pushes back toward all-time highs. If $660 fails, SPY could slip to $655, breaking the current bull channel and potentially opening the door to lower prices into month end. For bears to gain meaningful traction, however, SPY would need to break $640. Our base case for a 10–15% pullback this year remains on the table, yet we continue to view weakness as a buying opportunity and recommend buying every dip above $660. For Thursday, resistance sits at $662, $665, $667, and $670, with support at $660, $655, $653, and $650. Since reclaiming $585, SPY has held a steady uptrend fueled by dip buyers. Today Mag stocks were mixed, with Tesla, Meta, and Microsoft rallying while the rest slipped. ETH is hovering at $4100, below the $4300 major support level. Until consistent weakness emerges in these leaders, or ETH closes decisively below $4300 for several sessions, the market is likely to continue higher. Crypto weakness may prove a canary in the coal mine, but two days do not make a trend. We continue to favor quick profit taking and caution with overnight holds. The VIX fell 2.76% to 16.18, and while contango in VXX futures had suggested further declines, the curve is now more balanced with spot, signaling volatility may hold here or drift higher. 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 trigger the long-anticipated pullback. SPY closed just above the lower bull trend channel from the April lows, a level we will watch closely to see if the uptrend remains intact.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI ended the day in a wide Ranging Market State, with SPY closing just above MSI support. Extended targets printed briefly in the overnight session at the day’s highs and as the market sold off in the afternoon session. But once again these were sporadic at best indicating minor participation by the herd in today’s decline. The MSI rescaled higher overnight but the range was narrow and it was nothing more than a relief rally from the prior day’s drop. That quickly changed at the open with the MSI rescaling to a ranging state then printing several rescalings lower in a bearish state. Each rescale lower was narrow and with only brief periods of extended targets, as SPY approached major support at $660, dip buyers showed up once again, just like they did on Tuesday, pushing SPY back up above $661 into the close. For Thursday the MSI is implying a choppy and mainly sideways day with perhaps a drift higher overnight or a retest of the day’s lows. We expect more chop and two-way trading tomorrow. MSI support is $661.28 with resistance at $663.27.
Key Levels and Market Movements:
On Tuesday we wrote, “we expect the bulls to attempt a recovery while the bears may try for another test of the day’s lows,” and noted, “We expect more two-way trading that still favors the long side and continue to buy dips,” while also stating, “Overnight, the bulls want to defend $663 with SPY holding no lower than $658. Either dip should be treated as a buying opportunity.” With that context, and with the MSI maintaining a narrow bullish state at the open while multiple attempts to break above $665 failed, we looked for a short at the premarket resistance level of $664.50. That setup came quickly right out of the gate, so we entered short and set T1 just below MSI support at $663.50 to ensure a minimum $1 profit. T1 was filled quickly, so we set T2 at the next MSI level at $662.60 which also hit with little effort. With 90% of our position booked, we moved our stop to breakeven and trailed the remaining 10%, looking for the bears to attempt a retest of yesterday’s lows. That is exactly what unfolded. At $660 SPY set up a textbook failed breakdown, but with extended targets printing, we chose not to reverse long and instead simply closed the trade and called it a day. One and done just after noon, thanks gain 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 has GDP and Unemployment Claims, which are unlikely to move the market unless both come in very poor. We expect the bulls to attempt a recovery once again, while the bears may try for another test of the day’s lows. The market continues to favor the bulls long term, but the bears hold the ball in the near term, and a stall at the day’s highs could set up a solid short opportunity. The $663 level is now the line in the sand; bulls must reclaim it to regain full control, while a failure at $660 would likely lead to lower prices. We expect more two-way trading and will continue to buy dips into $660 and short on weakness near $663 or on a failed breakout. Even if $660 fails, the bears will only come to life in scale on a drop below $640. As such, it remains likely we continue to see new all-time highs, and our general bias remains to buy 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 $666 to $680 and higher strike Calls while buying $662-$665 Calls implying the Dealers belief that prices may recover on Thursday and as such, they wish to participate in any rally. The ceiling for tomorrow appears to be $667. To the downside, Dealers are buying $661 to $600 and lower strike Puts in a 3:1 ratio to the Calls they’re selling/buying 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 $665 to $690 and higher strike Calls while also buying $662 to $664 Calls implying the Dealers belief that prices will resume their ascent into Friday. The ceiling for the week appears to be $668. To the downside, Dealers are buying $661 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 $661.03, still inside the uptrend channel but near critical support. Longs remain favored above $660, with upside targets at $665 and $667. Shorts are only justified on breakdowns below $660 or failed breakouts near resistance. With GDP and PCE looming, stay nimble, avoid chasing, and lean on MSI and model levels to guide execution. The trend remains intact, but the path forward will be data-dependent.
Good luck and good trading!
