U.S. stocks slide as Federal Reserve interest rate cut looms

Lola Evans
17 Sep 2025, 01:46 GMT+10

The NASDAQ Composite was the most resilient of the major U.S. indexes, slipping just 1.72 points to settle at 22,347.03, a minimal loss of 0.01 percent.
The Dow Jones Industrial Average posted a more notable loss, falling 134.85 points, or 0.29 percent, to close at 45,748.60.
The benchmark Standard and Poor's 500 dipped by 7.51 points to end the day at 6,607.77, a decline of 0.11 percent.

NEW YORK, New York - U.S. stocks were sold off Tuesday, retreating from Monday's all-time highs for the Nasdaq Composite and S&P 500. Unsettling traders and investors was the two-day Federal Reserve FOMC committee meeting which will likely vote for a minimum 25 basis points rate cut, at the conclusion of its regular monthly meeting on Wednesday.

"Although labor demand is softening, labor supply issues continue to offset the weakness, and recession risks remain limited for now," Seema Shah, chief global strategist at Principal Asset Management told CNBC Monday. "Any decision to cut by 50 basis points at this stage would appear to be driven more by political pressure than economic necessity. A more measured 25 basis point cut remains the appropriate response, allowing the Fed to get ahead of a slowdown without overreacting to early signs of strain."

S&P 500 Slips Slightly Amid Choppy Trading

The benchmark Standard and Poor's 500 dipped by 7.51 points to end the day at 6,607.77, a decline of 0.11 percent. The index traded in a tight range throughout the session as market participants remained cautious ahead of upcoming inflation readings and central bank commentary.

Dow Falls on Blue-Chip Weakness

The Dow Jones Industrial Average posted a more notable loss, falling 134.85 points, or 0.29 percent, to close at 45,748.60. Several blue-chip stocks underperformed amid renewed concerns about slowing global growth and corporate earnings pressures.

Nasdaq Holds Steady with Minor Loss

The tech-heavy NASDAQ Composite was the most resilient of the major U.S. indexes, slipping just 1.72 points to settle at 22,347.03, a minimal loss of 0.01 percent. A mixed performance in the technology sector helped limit broader declines, even as traders rotated into defensive positions.

Market Outlook

With the next round of U.S. inflation data and the Federal Reserve's policy meeting approaching, markets appear to be in a holding pattern. While economic growth remains steady, uncertainty around rate cuts and corporate earnings continues to cast a shadow over risk assets.

Global Forex Markets: Euro and Pound Surge Against Dollar as Yen and Franc Advance

The world's major currencies saw notable gains against the U.S. dollar on Tuesday, as the greenback plummeted across a range of pairs amid shifting interest rate expectations and investor repositioning.

Euro Rallies Sharply Against US Dollar

The euro posted one of the strongest gains of the day, rising 0.84 percent to close at 1.1860 against the US dollar. The move reflects growing optimism over the eurozone's economic outlook and waning demand for the dollar as a safe haven.

British Pound Gains, Extending Upside Momentum

The British pound also advanced, with GBP/USD climbing to 1.3652, up 0.39 percent on the session. The move was supported by stronger-than-expected UK economic data and speculation that the Bank of England could hold rates steady for longer than previously thought.

Yen and Swiss Franc Rebound on Safe-Haven Flows

The Japanese yen strengthened, with USD/JPY falling to 146.46, a decline of 0.60 percent. Similarly, the Swiss franc saw significant gains, as USD/CHF dropped 1.03 percent to 0.7863. Both currencies benefited from risk-off sentiment in equity markets and increased demand for traditional safe-haven assets.

Commodity-Linked Currencies Rise Modestly

The Australian dollar saw a slight uptick, with AUD/USD up 0.18 percent to 0.6681, helped by stabilizing commodity prices and improved risk appetite in Asian markets.

The New Zealand dollar followed suit, with NZD/USD gaining 0.26 percent to close at 0.5985.

Canadian Dollar Edges Higher

The Canadian dollar also made ground against its US counterpart. USD/CAD fell by 0.21 percent, bringing the pair to 1.3748. The move came amid steady oil prices and a more dovish tone from US policymakers.

Outlook

Traders are now eyeing Wednesday's Fed rate decision for clues on the future path of interest rates.

Global Equity Markets End Mixed But Lean Bearish As European Indexes Slide, Asia & India See Modest Gains

Tuesday's global equity markets ended the trading day with a pronounced divergence between Europe, which saw sharp declines, and many Asia‐Pacific and Indian markets, which posted moderate gains.

TSX Drops on Energy and Materials Weakness

Canada's primary benchmark, the S&P/TSX Composite Index, declined by 115.79 points, or 0.39 percent, to finish at 29,315.23. The drop was driven largely by weakness in energy and materials shares, sectors that remain closely tied to global commodity price fluctuations.

UK and Europe Under Pressure as Euro and Pound Surge

In the UK and Europe, selling dominated across most major benchmarks:

The FTSE 100 fell to 9,195.66, down 81.37, a drop of 0.88 percent.
Germany's DAX P slid to 23,329.24, losing 419.62, or 1.77 percent.
France's CAC 40 closed at 7,818.22, down 78.71 points, or 1.00 percent.
The Euro STOXX 50 ended at 5,372.31, down 68.09, down 1.25 percent.
The Euronext 100 (N100) dropped 14.30 points to 1,619.78, a decrease of 0.88 percent.
Belgium's BEL 20 closed at 4,707.31, down 57.19, or 1.20 percent.

Asia and Pacific & Emerging Markets: Mixed But Many in the Green

Meanwhile, markets in Asia and emerging regions delivered mixed but generally positive results:

China's SSE Composite posted a slight gain – up 1.36 points to 3,861.86, up 0.04 percent.
Japan's Nikkei 225 closed at 44,902.27, up 134.15, or 0.30 percent.
Hong Kong's Hang Seng Index was nearly flat, closing at 26,438.51, down just 8.05 points, or 0.03 percent.
Singapore's STI Index dipped slightly to 4,337.74, losing 0.68, or 0.02 percent.
Australia's S&P/ASX 200 rose to 8,877.70, up 24.70, or 0.28 percent.
The All Ordinaries gained 30.30 points to 9,151.20, up 0.33 percent.
India's BSE Sensex advanced notably, ending at 82,380.69, up 594.95, or 0.73 percent.
Indonesia's IDX Composite increased to 7,957.70, up 20.58, or 0.26 percent.
New Zealand's S&P/NZX 50 was up by 26.58 to 13,234.89, an increase of 0.20 percent.
South Korea's KOSPI Composite Index rose 42.31 points to 3,449.62, gaining 1.24 percent.
Taiwan's TWSE Capitalization Weighted Index added 272.48 points for a close at 25,629.64, up 1.07 percent.

Middle East and Africa Moves

Israel's TA‑125 slipped to 3,102.85, down 12.07 points (0.39 percent).
Egypt's EGX 30 Price Return Index dropped 325.00 to 34,840.80, a fall of 0.92 percent.
South Africa's Top 40 USD Net TRI rose modestly to 6,041.79, up 18.50, or 0.31 percent.

Outlook & Investor Sentiment

The sharp declines in UK and markets suggest investor concern over economic headwinds—surging currencies, rising borrowing costs, inflation risks, and geopolitical tensions appear to be dampening sentiment. Conversely, in Asia and parts of the emerging world, modest gains indicate pockets of optimism—possibly driven by expectations of stimulus, better earnings, or relatively favorable domestic conditions.

As markets move forward, eyes will likely remain on upcoming central bank policy announcements, inflation data, and global trade developments, which may tip the balance one way or the other.

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