Main Wall Street Indexes Hit New Record Highs Driven By The Fed And Tech Boom
By Antonio Di Giacomo, Financial Markets Analyst for LATAM at XS.com
September 20, 2025 –
“Wall Street’s main indexes closed the week with notable gains, consolidating fresh all-time highs. The Dow Jones surpassed 46,365 points with a rise of more than 1%, the S&P 500 advanced to 6,660 points, also with a gain of over 1%, and the Nasdaq, supported by the strength of the tech sector, reached 24,584 points, posting a rebound of more than 2%. This performance reflects investors’ confidence following the Federal Reserve’s recent decision to cut its benchmark rate.
The 25-basis-point cut set the interest rate in a range of 4.00%–4.25%. This marks the first downward adjustment since last December, signaling a shift in monetary policy. The Fed anticipates further cuts throughout 2025 and an additional one in 2026, although Jerome Powell clarified that these decisions will depend on the evolution of inflation and economic growth.
Markets welcomed this shift, as looser monetary policy supports both lending activity and the valuation of financial assets. The current environment combines monetary and fiscal stimulus, creating a favorable backdrop for investors. The expectation of a more accommodative stance helps sustain confidence despite persistent inflationary pressures in some sectors.
Technology, particularly artificial intelligence, continues to be one of the market’s primary drivers. Leading companies in semiconductors, software, and cloud services have reported increases in revenues and profits, supporting the Nasdaq’s climb. Investor enthusiasm for AI continues to channel funds toward these companies, which are seen as key catalysts for medium-term growth.
Meanwhile, sectors more sensitive to interest rates, such as real estate and consumer discretionary, are also showing some recovery. Cheaper credit is beginning to filter into housing activity and household spending, although mixed signals remain regarding labor market strength and consumer confidence. These variables will be critical in assessing the effectiveness of the Fed’s measures.
In global markets, U.S. policy is generating immediate repercussions. The initial strengthening of the dollar after the Fed’s announcement gave way to a correction as investors adjusted their liquidity expectations. At the same time, oil and metal prices have shown volatility, reflecting both uncertainty over demand and shifts in currency dynamics.
Analysts agree that 2025 will be a key year to assess whether the combination of monetary stimulus, expansive fiscal policies, and technological momentum can sustain the growth cycle. While stock markets are celebrating the new direction, the risks of persistent inflation or a slowdown in consumption remain on the economic horizon.
In conclusion, Wall Street’s recent performance reflects a moment of optimism, fueled by the Federal Reserve’s decision and the strength of the tech sector. However, the sustainability of this trend will depend on the economy’s ability to balance growth with price stability. In this context, investors will remain attentive to every signal from the Fed and to the evolution of the strategic sectors driving the markets.