S&P500: Palantir, Micron Surge While Fed Outlook Steers US Benchmark Forecast

S&P 500 Heads for Strongest Weekly Gain in Over a Month as Fed Outlook Looms

The S&P 500 is on track to notch its best weekly performance since early August, up 1.7% for the week and poised to close higher for the fifth time in six weeks. On Friday, the index hovered near the flatline as traders shifted focus to next week’s pivotal Federal Reserve meeting, where expectations of a rate cut are running high.

Will the Federal Reserve Deliver on Rate Cut Expectations?

Investors are betting the Fed will lower interest rates for the first time since December, with some hoping for a larger-than-expected 50 basis point cut. The outcome of the Sept. 16-17 policy meeting and the updated Summary of Economic Projections will be key in shaping rate cut expectations for the remainder of the year. Fed Chair Jerome Powell’s comments will be under the microscope, especially as concerns about a softening labor market intensify.

Are Bond Yields and Gold Sending Warning Signs?

The bond market is already reacting to economic uncertainty. This week saw a split in the yield curve: short-term yields edged higher, while long-term yields declined. This shift is stoking fears of a potential economic slowdown, especially in light of recent employment data. “The whole yield curve is shifting down, but the curve is changing shape as well,” noted Mark Malek, CIO at Siebert Financial, pointing to rising recession concerns. Meanwhile, gold has gained ground, often a signal of rising market caution.

Which Sectors and Stocks Outperformed — and Which Lagged?

Technology led sector gains, climbing 0.42%, helped by strength in names like Tesla (+6.64%), Micron (+4.68%), and Palantir (+4.1%). Utilities also saw a solid bid, rising 0.62%. On the downside, Materials and Health Care fell the most, slipping 1.08% and 0.99%, respectively. Arista Networks plunged 8.68%, leading decliners after disappointing sentiment. Moderna, Oracle, and Lennox also dropped sharply.

What Should Traders Watch Heading Into Next Week?

Next week’s Fed decision will likely dictate near-term market direction. While a rate cut could fuel further equity gains, any hint of hesitation or dovish disappointment could trigger volatility. Traders should also watch for fresh labor data and how the yield curve continues to evolve. With the S&P 500 sitting near recent highs, the risk-reward balance will hinge heavily on how the Fed communicates its path forward.

More Information in our Economic Calendar.