TheDrop Market Analysis, 10/08/25

Markets rose, reversing much of their losses from Tuesday as investors regained hope for an imminent interest rate cut as early as this month after the release of Federal Reserve minutes.

Chair of the Federal Reserve Bank Jerome Powell, who will retire from his position next year.

The S&P 500 index rose 0.6%, the Nasdaq Composite rose by over 1% making all-time highs, and the Dow Jones Industrial Average fell very marginally. The VIX volatility index fell 5.45%, reflecting the rather lackluster movements experienced today as investors had mixed reactions with Fed minutes but also the ongoing government shutdown, preventing the release of jobs data from the Department of Labor Statistics (BLS).

Meanwhile, European stocks had a field day, with the British FTSE 100 rising 0.69% and the CAC 40 rising 1.07% as U.S. news penetrated worldwide. Asian tickers also had similar responses, especially the Nikkei 225, whose mother country Japan holds close economic ties to the United States. Therefore, rate cut hopes in America branched out globally as the U.S. dollar, the global reserve currency, is projected to become less rates-heavy, meaning that loans would become more available for economic expansion by both governments and private entities.

Cryptocurrency and gold, however, made some correction today after recently reaching all-time highs. Gold, for instance, fell 0.5%, but still remains over $4,000 per ounce.

Stocks generally rose after the release of the Federal Reserve minutes, which showed that nearly half of officials (governors) in the bank expected three rate cuts in 2025. Keep in mind that the first of these occurred just last month. Investors saw this as an opportunity to hope for two more 25 basis point cuts in the last months of 2025, especially in October, which has a Fed meeting expected to deliver rate cut news.

The Magnificent Seven made landmark gains after previously falling in line or behind the market in previous trading days. Nvidia led the pack with its 2.2%, facilitated by greater sentiments toward the artificial intelligence industry, especially in the aftermath of AMD's AI infrastructure deal with OpenAI.