Nasdaq Composite extends weekly gain by 250 points lifted by Fed policy shift

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Sholanke Dele

18.09.2025

Nasdaq Composite extends weekly gain by 250 points lifted by Fed policy shift — Nasdaq sentiment improves after measured rate cut

The Nasdaq Composite Index experienced volatility on Wednesday as traders balanced profit-taking, company-specific news, and anticipation of the Federal Reserve’s rate decision.

Early in the North American session, selling pressure emerged after a report suggested that Chinese technology firms might halt purchases of Nvidia chips. The development weighed on the AI giant’s shares and dragged the broader index lower, extending losses from the recent record close at 22,330.

- Nasdaq rebounds from four-day low, trims losses after Fed confirms first cut.

- Nvidia shares recover 2.3%, reinforcing the semiconductor sector’s heavy impact on the Nasdaq.

- Nasdaq futures point to 22,500 open as rate-cut renewed sentiment.

As the session progressed, investors shifted focus to the outcome of the Federal Open Market Committee meeting. The Fed delivered its first-rate cut of the year, lowering borrowing costs by 25 basis points. Despite expectations being firmly anchored for such a move, the announcement sparked a brief dip in equities. The Nasdaq slid to a four-day low near 22,035 before staging a rapid rebound into the close at 22,260. That recovery trimmed the day’s net loss to just 75 points, after being down nearly 280 points at the intraday low.

Nasdaq price dynamic (August - Sept 2025). Source: Tradingview

On Thursday, September 18, sentiment improved significantly in premarket trading. Investors absorbed the Fed’s measured tone, where Chair Jerome Powell described the cut as a risk management step rather than the start of an aggressive easing cycle. While this tempered expectations for rapid rate reductions, markets still responded positively to the confirmation that monetary conditions are shifting toward accommodation. As a result of the rate cut, Nasdaq futures rose 250 points today, placing the index on course to open near record highs at 22,500.

Nvidia recovery highlights semiconductor sector’s influence on Nasdaq sentiment

Contributing to the improved outlook, Nvidia shares recovered 2.3% in premarket action after the prior day’s selloff. The rebound is a sign of how sensitive the index remains to developments in the semiconductor sector, particularly given Nvidia’s outsized influence within the Nasdaq. Broader U.S. equities also traded higher in response to the policy shift, as investors positioned for the potential benefits of lower borrowing costs on corporate earnings and valuations.

The Nasdaq’s technical backdrop has also strengthened. The previous record high at 22,400, set earlier this week, is now being tested as a potential support level. Holding above this threshold would reinforce the bullish structure and signal that dip buyers are confident in sustaining momentum. On a weekly basis, the index’s gains have expanded to 1.66%, adding to the strong trend established through the month.

In summary, while midweek weakness reflected company-specific risks and pre-Fed caution, the rate cut has revived buying interest and helped extend the Nasdaq’s rally. The index now stands at the threshold of new highs, with policy support and renewed strength in heavyweight stocks setting the stage for further upside if buyers defend key levels.

Bond yields 4% dip boosted Nasdaq valuation appeal for growth stocks. The Nasdaq extended record highs as rising volumes confirmed strong investor conviction.

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