If you only checked your portfolio once this week — say, Friday evening with a cup of coffee — you’d think nothing much happened. The S&P 500 finished the week down less than 0.1%. Flat. Boring. But that single number is hiding one of the most dramatic five-day stretches we’ve seen in a while: a hawkish surprise from the Federal Reserve, a relief rally led by the very tech stocks everyone had written off, and a quiet Friday finish on one of the market’s wildest trading days of the year.
Let me walk you through it, day by day, because the story of this week is really the story of how markets digest news — first with fear, then with second thoughts.
Wednesday: The Fed surprises, and the Dow drops 631 points
It started with the Federal Reserve. On Wednesday, September 16, the FOMC voted unanimously to raise the federal funds rate by a quarter point to 3.75%–4.00% — the first hike since July 2023 — and the dot plot signaled another hike could come before year-end. Fed Chair Kevin Warsh said the move “removed a dose of accommodation,” which is central-banker for “we don’t think we’re being that restrictive.”
Investors had expected a hike. What rattled them was the tone. The Dow fell 1.21% — 631 points — to 51,461.90. The S&P 500 dropped 0.45% to 7,551.81. The Nasdaq barely budged, down just 0.01% to 25,978.42. The 10-year Treasury yield sat at 4.98%, and the VIX — Wall Street’s fear gauge — actually fell nearly 13% to 15.45, suggesting the selloff was orderly, not panicked. Schwab’s recap of the day captured the mood: surprised, but not scared.
Thursday: The snapback
Then came Thursday, and the market changed its mind — or at least decided it had overreacted. Falling bond yields and easing oil prices set the tone, and buyers piled back into the year’s most beaten-down names: AI-linked hyperscalers, chipmakers, and storage stocks.
The numbers were striking. The S&P 500 rose 1.1% to 7,637.76. The Dow gained 0.61% to 51,778.04. The Nasdaq surged 1.69% to 26,418.30, according to Thursday’s market coverage. The PHLX Semiconductor Index jumped 3.1%. The State Street Software and Services ETF — tracking about 130 software stocks — rose 5.2% to a record, which Axios Markets flagged as proof that software’s recovery from its early-year selloff is real.
Two company-specific sparks helped. Generac — the generator maker — soared 19% after announcing an agreement with Amazon for data-center generators, with projected initial deliveries totaling $2.4 billion in 2027–2028. And the SEC cleared a path for trading venues to offer tokenized-stock trading, a crypto-like format for equities that lifted crypto-linked sentiment late in the week. Both stories came via the Journal’s Thursday market recap.
Friday: Triple witching, and a quiet finish
Friday brought what traders call triple witching — S&P options, futures, and other contracts all expiring on the same day, one of only four such days a year. As Seeking Alpha’s Wall Street Breakfast host Steven Cress advised, long-term investors should take witching-day moves “with a grain of salt.”
And indeed, the finish was calm: the Dow off about 0.2%, the S&P 500 up about 0.2%, the Nasdaq up 0.4%. The 10-year Treasury moved back above 5% — closing at 4.995% — while the 2-year closed at 4.741%, its highest since July 2024. Oil edged lower as fears of major supply disruptions eased. The Journal’s closing coverage called it a quiet finish to a volatile week, which feels exactly right.
Friday also carried real company news beneath the index-level calm. Netflix fell nearly 5% after Wells Fargo downgraded the stock on weak viewership trends. Nestlé dropped more than 2.5% after the Russian government seized control of its local assets. Sandoz rose 1% after Canadian regulators approved its generic version of Ozempic. And Nike retreated more than 2% ahead of its removal from the S&P 100 index. Oh — and Warren Buffett stepped down as Berkshire Hathaway chairman, a generational changing of the guard that the Journal carried as a top story.
The weekly scorecard
For the full week: the Dow fell 1.7% — its third consecutive weekly loss. The S&P 500 slipped less than 0.1% — its second straight weekly downer, but barely. The Nasdaq rose 0.7%. All three figures via the Journal’s weekly wrap.
That split tells you everything about where we are. Old-economy blue chips are struggling with higher rates and a strong dollar — the dollar index broke above 100 for the first time since July, reaching 100.30. Tech, powered by AI spending that refuses to slow, is carrying the market on its back.
What I’m taking into next week
Three thoughts, offered humbly. First, the market has now priced in a Fed that hikes rather than cuts — Goldman expects the next move at the October 27–28 meeting — so the surprise risk has shifted: a pause would now be the dovish shock. Second, the 10-year back above 5% is the number to watch; as The Daily Upside noted, stock-bond correlations have historically turned positive when the 10-year stays above 5.25%, which would change the math for every diversified portfolio. Third, and most human: weeks like this are why we don’t make decisions on Fridays. The Wednesday sellers and the Thursday buyers were looking at the same Fed. Only the story changed.
Numbers to carry into next week
If you want a pocketful of context for the week ahead, here are the levels that matter. The dollar index broke above 100 for the first time since July, reaching 100.30 — a strong dollar that quietly taxes every American multinational’s overseas earnings. Gold hovered near records around $4,415 an ounce on Friday, the classic fear trade doing its job even in a week that ended calmly. WTI crude settled at $100.30 on Friday — down 1.6% on the day but up 0.2% for the week — with prices holding near $100 amid Saudi pipeline disruptions and Strait of Hormuz risks, per TradingView’s commodity coverage. And Bitcoin traded around $77,000–$78,000, recovering from an overnight low near $76,200 after U.S. spot Bitcoin ETFs saw $450 million in net outflows on September 16 before flows turned positive again.
Meanwhile, the global picture kept tightening: the Bank of Japan raised its policy rate to 1.25%, a 31-year high, on a 7–2 vote. When Tokyo, London, and Washington are all leaning hawkish in the same week, it’s not a local story anymore — it’s the world repricing money at the same time. That’s the backdrop for everything next week: earnings, economic data, and the slow grind of a market learning to live with higher rates.
Deo Salvator’s note: this column is for understanding, not advice. If a volatile week has you reaching for the sell button, that’s a good moment to call someone who knows your plan — not to abandon it.
