Dancing With the Fed: Markets Waltz Into Record Highs

September 15, 2025

Market Roundup for the Week

Rate cuts by the Federal Reserve Bank dominated expectations all week long. Weak labor market data along with super soft job growth appeared to confirm to investors that the Federal Reserve Bank will announce a lowering of rates at its September meeting. There are predictions of a definite 25 basis point cut, though a 50 basis point cut does look on the horizon as well.

Inflation stayed above target with CPI higher due to housing and food costs. However, labor markets are showing signs of strain with higher than expected unemployment claims and weakening job growth. The latter has investors leaning more towards easing despite the tug-of-war between a sticky inflation and worsening job markets.

Technology stocks continued to maintain upward momentum and push up markets with continuing strong demand in general and AI-related guidance in particular.

The S&P was also higher though not uniformly across all sectors. In addition, a certain sense of fatigue appeared to be creeping in with investors as gains were less broad as the week progressed.

Fixed income investments were boosted by the expectations of rate cuts and, of course, the dollar continued to weaken against major currencies.

Strategy Corner

Based on this week's market movements, here are some trading ideas and option strategies for the readers' consideration. The positions can be scaled bigger if suitable for larger accounts.

ORCL (closed around 292.10 on Friday, Sep 12th)
Despite delivering mixed earnings, this stock experienced a significant surge in price. Following that, if a trader is neutral on ORCL for the next 33 days, then an Iron Condor strategy could be a profitable trade.
For Oct 17 expiration, sell the 260/340 strangle and buy the 230put and 370call to bring in the buying power
Premium collected: $614 / Buying power deployed: $2400
Probability of profit: 68%
Breakevens at around 254 and 346
If ORCL expires:
– between 230 and 260, the profit would be positive but less than 614
– between 340 and 370, the profit would be positive but less than 614
– anywhere between 260 and 340, the profit would be about 614
– below 31, the position would need to be closed or managed by rolling out in time or rolling down the call spread

PnL Calculator from the IVolLive Web
NBIS (closed around 90.45 on Friday, Sep 12th)
This stock experienced a significant surge in its stock price during the week of September 8-12, 2025, primarily due to a landmark artificial intelligence (AI) infrastructure deal with Microsoft.
If a trader is neutral on NBIS but would like to sacrifice some credit received and capture some downside movement in case of a big drop, a ratioed strangle could be a profitable trade.
For Oct 17 expiration, sell three 75puts / buy one 80 put / sell two 110calls
Premium collected: $840 / Buying power deployed: $1937
Risk to both sides with breakevens around 62 and 118; max potential profit $1339
If NBIS expires:
– at sweetspot of 75, profit would be $1340
– anywhere between 80 and 110, profit would be between $840
– beyond the breakevens, the position would need to be closed or managed by adding duration

PnL Calculator from the IVolLive Web

Weekly changes in Major Indices

INDEX	UP	DOWN
SPY	1.16%
QQQ	1.84%
IWM		-.1%
DIA	.96%
GLD	.15%
BTC/USD	3.94%
30-year US treasury bond	1.57%
Crude Oil		-1.16%
VIX		-.73%

Top S&P 500 Gainers:

Warner Bros Discovery (WBD) jumped 56% primarily due to reports that Paramount Skydance is preparing a majority-cash acquisition bid for the company.

Oracle (ORCL) jumped 26% primarily driven by a strong earnings report and the announcement of substantial AI-driven cloud infrastructure contracts.

Paramount Skydance (PSKY) jumped 25% primarily due to market speculation regarding a potential acquisition of Warner Bros. Discovery (WBD).

Micron Technology (MU) jumped 20% primarily due to analyst upgrades and price target increases.

EchoStar (SATS) jumped about 20% after it agreed to sell wireless spectrum licenses to SpaceX for its Starlink project.

AppLovin (APP) jumped about 19% following the announcement of their planned inclusion in the S&P index.

Robinhood (HOOD) jumped about 14% following announcement of its planned inclusion in the S&P index.

Broadcom (AVGO) jumped 7.5% helped by positive AI-related revenue outlooks.

Top S&P 500 Losers:

Synopsys (SNPS) dropped 29% primarily due to disappointing third-quarter earnings and concerns over geopolitical factors affecting its business.

The Trade Desk (TTD) dropped 13% primarily due to intensifying competition and analyst downgrades.

Humana (HUM) dropped 10% primarily due to concerns over upcoming Medicare Advantage (MA) quality ratings.

Review selected market profiles below:

Chart from the IVolLive Web