U.S. equity markets are showing a positive trajectory midday on Friday, September 26, 2025, as investors digest key inflation data that largely met expectations, easing some concerns that had led to a three-day losing streak for major indexes. The Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, rose 2.7% year-over-year in August, a slight acceleration from July's 2.6% but in line with forecasters' predictions. Core PCE, excluding volatile food and energy prices, also matched expectations at a 2.9% increase. This "Goldilocks" scenario has provided a much-needed boost to market sentiment, with all three major indexes attempting to claw back recent losses.
Major Index Performance and Midday Momentum
As of midday trading, the Dow Jones Industrial Average (DJIA) has successfully halted its three-session losing streak, advancing by approximately 0.3%. The S&P 500 (SPX) is also trading higher, up around 0.2%, while the tech-heavy Nasdaq Composite (COMP) is virtually unchanged after opening higher and then slipping slightly. This midday rebound follows a period of investor caution, influenced by anticipation of the PCE report and broader economic uncertainties, including concerns over stretched equity valuations. Prior to today, all three indexes had posted three consecutive record highs through Monday, September 22, before experiencing a corrective period.
Market momentum today is characterized by a cautious optimism. While futures had indicated a mixed opening, the alignment of inflation data with expectations has provided a clearer path for investors. The market's immediate reaction suggests a keen responsiveness to economic data, particularly as the Federal Reserve continues to navigate its monetary policy path.
Upcoming Market Events and Economic Catalysts
Looking ahead, the August PCE figures, released today, are crucial for shaping the Federal Reserve's future monetary policy decisions. The Fed had already reduced its policy rate last week for the first time this year, and the "dot plot" from the Summary of Economic Projections pointed to two additional cuts by the end of the year and one more next year. However, stronger-than-expected labor data earlier in the week, including sharply falling jobless claims and an upward revision to second-quarter GDP to 3.8%, had tempered some investor optimism regarding aggressive rate cuts. Richmond Fed President Tom Barkin is scheduled to speak today, and his comments will be closely watched for further insights into the Fed's thinking on inflation and employment.
Beyond today, investors will be monitoring several key economic indicators next week. These include further job openings data, consumer confidence, home price growth, and the ISM manufacturing and services indexes. Eurozone CPI inflation for September and Japanese business survey data are also on the calendar, which could influence global market sentiment.
Major Stock News and Company Highlights
Several major companies are making headlines today, driving significant stock price movements:
- Microsoft (MSFT): Shares of the software giant are in the spotlight after Morgan Stanley raised its price target to $625 from $582, maintaining an "Overweight" rating and naming Microsoft its "Top Pick" in large-cap software. Morgan Stanley cited sustained momentum on the top-line, better appreciation of growth drivers, and resolution of uncertainty around the OpenAI relationship. Microsoft is also expanding its AI capabilities by integrating Anthropic AI models into its Copilot assistant. However, Microsoft's shares fell 0.61% on Thursday due to broader tech declines. In other news, Microsoft has blocked certain Azure cloud and AI services for an Israeli military intelligence unit following an internal review that found preliminary evidence of policy violations related to mass surveillance.
- Tesla (TSLA): Tesla's stock has seen significant volatility. While some reports indicate a rebound in share price, with a 6.4% surge following Elon Musk's purchase of approximately $1 billion worth of Tesla stock in mid-September, other reports highlight concerns over plunging EV sales. Tesla is nearing all-time highs ahead of its Q3 2025 deliveries next week, with some analysts attributing optimism to Elon Musk's stock purchase and the broader AI rally. However, concerns persist about declining deliveries, revenues, and margins, and the potential for demand being pulled forward due to expiring U.S. EV tax credits. The stock slumped over 4% on Thursday due to weak EV sales.
- Nvidia (NVDA): Nvidia's stock has shown some volatility in 2025 but has delivered respectable gains. The company's growth continues to be impressive due to the fast-growing demand for AI accelerators, with its data center revenue rocketing 56% year-over-year to a record $41.1 billion in the second quarter. Analysts project Nvidia's dominance in the AI accelerator market could continue through Blackwell GPU adoption and CUDA's software moat. However, some analysts question the sustainability of its valuation given its high cash burn rate and the circular nature of some of its deals with partners like CoreWeave and OpenAI.
- CarMax (KMX): Shares of CarMax plummeted 20.1% after the company reported second-quarter 2025 earnings of $0.64 per share, significantly missing the Zacks Consensus Estimate of $1.03 per share.
- TD SYNNEX Corporation (SNX): The company's shares gained 6.2% after reporting third-quarter fiscal 2025 earnings of $3.58 per share, surpassing the Zacks Consensus Estimate of $3.02 per share.
- BlackBerry (BB): Shares jumped 8.8% after the company reported second-quarter 2025 earnings of $0.04 per share, beating the Zacks Consensus Estimate of $0.01 per share.
- Intel (INTC): Intel stock surged 9% on Thursday and added a further 3.5% today, following reports that the chipmaker had discussed Apple (AAPL) buying a stake.
- Oracle (ORCL): Oracle shares fell 5.6% on Thursday and were down a further 2.5% today, as concerns over AI monetization hit tech stocks.
- Amazon (AMZN): Amazon shares ticked higher today after closing lower every day this week, following the company's agreement to pay $2.5 billion to settle an FTC lawsuit over allegedly deceptive subscription practices for Prime memberships.
- Pharmaceutical Companies: U.S. President Donald Trump's announcement of new 100% duties on imported pharmaceutical drugs, effective October 1, has caused ripples in the market. While U.S. pharma companies ticked higher, the broader pharma sector, particularly in India, saw declines.
- Furniture and Heavy Truck Companies: Trump's new tariffs also target imported furniture, kitchen and bathroom cabinets, and heavy trucks. Shares of furniture firms like RH (RH) and Williams-Sonoma (WSM) fell, while Peterbilt parent Paccar (PCAR) surged 5% after the announcement of a 25% duty on imported heavy trucks.
Overall, the market is navigating a complex landscape of inflation data, Federal Reserve expectations, and significant corporate developments. The midday rally suggests a resilient market, albeit one that remains highly sensitive to economic indicators and policy shifts.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.