Wall Street finally caught a breath on Friday. After three straight days of watching the red ink spread, the major indexes managed to claw back into positive territory. Honestly, it was a weird week. We started Monday hitting all-time highs, only to spend the next 72 hours wondering if the AI-fueled party was finally getting shut down by the bouncers.
By the closing bell on stock market news september 26 2025, the Dow Jones Industrial Average rose about 300 points, or 0.7%, to finish at 46,247.29. The S&P 500 followed suit with a 0.6% gain, and the tech-heavy Nasdaq added 0.4%. On paper, a green day is a win. But if you look at the weekly scorecard, the vibes were a lot more somber. Even with Friday's bounce, the Nasdaq still ended the week down 0.6%, proving that investors are getting a lot more selective about where they park their cash.
The PCE Report: The Goldilocks Moment?
The big catalyst for Friday’s turnaround was the August Personal Consumption Expenditures (PCE) price index. This is the Federal Reserve’s favorite way to measure inflation, and for once, there were no nasty surprises. Core PCE, which strips out the volatile stuff like food and energy, rose 0.2% for the month. That put the annual rate at 2.7%.
It matched what the experts were expecting. In this market, "no news" is basically "great news."
Because the numbers weren't "hot," the narrative shifted back to the Federal Reserve. Just last week, the Fed cut rates for the first time in ages—a 25-basis-point drop that brought the range to 4.0%–4.25%. Traders are now betting that the Fed can keep this "soft landing" streak going. But don't get too comfortable. While the CME FedWatch tool showed a high probability of another cut in October, that confidence actually slipped a bit earlier in the week after some "too-good" economic data made people worry the Fed might stay hawkish.
The Drama Behind the Numbers: EA and Costco
If you were watching the tickers on Friday afternoon, you probably saw Electronic Arts (EA) go vertical. Around 2:30 p.m. ET, a report hit that EA was nearing a deal to go private. We're talking about what could be the largest leveraged buyout of all time, potentially valuing the gaming giant at $50 billion. The stock shot up 15% in a heartbeat. It’s one of those "blink and you miss it" moments that reminds you why the S&P 500 can be so unpredictable.
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On the flip side, Costco (COST) had a rougher outing. Even though they beat earnings expectations, their U.S. same-store sales were just a tiny bit soft. The stock slid 2.9%. It seems shoppers are still loading up on $1.50 hot dogs but are starting to think twice about that new 80-inch OLED TV.
Then there’s the furniture sector. President Trump took to Social Media late Thursday to announce a massive 50% tariff on imported kitchen cabinets and 30% on upholstered furniture. This sent shockwaves through the industry. Companies with big domestic factories saw a boost, but high-end retailers like RH (formerly Restoration Hardware) got hammered as investors worried about rising costs.
Why the AI Trade is Stuttering
We’ve spent the last two years obsessed with anything that has "AI" in the mission statement. But on September 26, the cracks in that "buy everything" strategy were showing. Oracle (ORCL) fell 2.7% after analysts basically said the market is being way too optimistic about their cloud growth.
Even Tesla (TSLA) took a 4.4% hit earlier in the week. There’s this growing anxiety about "monetization." Basically, everyone spent billions on chips and data centers, and now the shareholders are asking, "Okay, when do we actually see the profit from this?"
Interestingly, Intel (INTC) was the outlier. It jumped over 4% on Friday, extending a massive week-long rally. The rumor mill is working overtime with reports that Apple might be looking to take a stake in the chipmaker. When you consider Intel was basically left for dead by many traders a year ago, seeing it soar 20% in a single week is nothing short of wild.
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The Weird Case of Smart Digital Group
Beyond the blue chips, there was a total meltdown in the small-cap world. Smart Digital Group (SDM) saw its stock price collapse by over 86% in a single day. It was absolute chaos. The NASDAQ had to halt trading for volatility just minutes after the open.
It turns out there are allegations of a massive market manipulation scheme involving "finfluencers" and impersonators on social media. It's a sobering reminder that while the S&P 500 feels like a safe bet, the fringes of the market are still a bit like the Wild West.
What This Means for Your Portfolio
So, where does this leave us as we head into October?
The market is currently in a "show me" phase. Inflation is cooling, which is great, but the economy is still growing at a 3.8% clip—which is actually fast. Usually, you don't get rate cuts when the economy is humming like that. It creates this weird tension where good news for the economy is sometimes bad news for stocks because it means interest rates might stay higher for longer.
Actionable Insights for the Week Ahead:
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- Watch the 10-Year Yield: If the 10-year Treasury yield starts climbing back toward 4.3%, expect tech stocks to feel the squeeze again.
- Audit Your AI Exposure: Stop buying "AI" just because it's a buzzword. Look for companies like SanDisk (now a top performer under Western Digital) that are showing actual revenue growth from AI storage demand.
- Mind the Tariffs: The new furniture and cabinet tariffs take effect October 1. If you're holding retail or manufacturing stocks, check their supply chain exposure now.
- Keep Cash on Hand: We are still near all-time highs, but the VIX (the "fear gauge") ticked up this week. Volatility isn't going away, especially with the political pressure mounting on the Fed.
The rebound on September 26 was a nice way to end a stressful week, but it didn't solve the underlying jitters. Investors are no longer throwing money at everything that moves. They're looking for real profits, stable margins, and a Fed that doesn't get spooked by its own shadow.