The Dow Jones fell, but the Nasdaq Composite ended the day at a new record high. This is because investors are beginning to think that interest rates will drop, even though the economy has been sending mixed signals.
The Nasdaq Composite went up about 0.45% on September 12, 2025, and concluded the day at its greatest level ever. The S&P 500 stayed the same, but the Dow Jones Industrial Average moved down by about 0.6%.
People who invest have changed their minds because they expect the Federal Reserve will lower interest rates at its next meeting. This is happening because inflation is going down and the employment market is getting weaker.
This means:
If interest rates go down, the gap between tech-heavy indices and value/cyclicals may get bigger. This would be good for businesses that develop things that support AI and growth.
The drop in the Dow might mean that investors are moving away from traditional industries like finance and industry and towards tech equities.
There are still things that could go wrong, such rising inflation and global macro risk.
Things to Watch Out For:
Next week, the Federal Reserve will meet to talk about how much and what kind of rate cut to make.
People’s feelings could change when new information about jobs and inflation comes out soon.
How do big tech and AI companies like Microsoft and Tesla stack up against industries that are more affected by interest rates?