Market Insights - Week of September 21st

Major Indices Outlook for the Week Ahead

Welcome back to the Hobbs Trades weekly newsletter! As your go-to market analyst here at www.hobbstrades.com, I'm providing a comprehensive overview of the major indices—S&P 500, Nasdaq 100, Dow Jones, and Russell 2000—as we enter the trading week starting September 22, 2025. The Fed's 25bps rate cut last week, coupled with dovish rhetoric on further easing, propelled markets to new highs, though small caps stole the show with a record close. With earnings season ramping up and tariff talks simmering, expect volatility as investors digest the soft-landing narrative. Broader trends stay bullish, but watch for profit-taking amid stretched valuations. Let's break it down.

Recent Performance Recap

Major indices closed the week on an upbeat note following the Fed's dovish pivot and resilient economic data. The **S&P 500** ended at 6,664.36, up 1.22% for the week, marking a new all-time high with broad gains across sectors. The **Nasdaq 100** climbed to 24,569.61, gaining 1.95%, fueled by AI and tech rebounds for a YTD surge exceeding 21%. The **Dow Jones** advanced 0.90% to 46,315.27, buoyed by cyclicals amid the rate-cut relief. The **Russell 2000** soared 2.42% to a record 2,465.52, its first all-time high since 2021, up 11.75% YTD on small-cap rotation.

September's early momentum builds on August's solid returns, with the S&P 500 up 1.91% last month, though historical seasonality warrants caution. Valuations are elevated—S&P at 22-23x forward earnings, Nasdaq at 27x—but rate cuts and 7-10% projected earnings growth for 2025 bolster the upside case. Recent X chatter buzzes with Fed-fueled optimism, traders targeting Nasdaq above 24,500 and Russell breakouts to 2,500, though some flag tariff risks as a pullback trigger.

Key Price Levels for Futures

Futures hover near records post-Fed, with earnings and trade headlines as catalysts. Here's what to watch for each index:

* S&P 500 (ES Futures): Trading around 6,664, support near 6,653 (recent low), with cushions at 6,642–6,648 and deeper 6,617 if selling picks up. Resistance at 6,675–6,700 (recent highs), eyeing 6,731 or 6,742 on continued momentum.

* Nasdaq 100 (NQ Futures): Near 24,570, support at 24,400, with 24,300–24,350 and 24,000 below. Resistance at 24,600 and 24,800 could yield to 25,000 if tech rallies persist.

* Dow Jones (YM Futures): Around 46,315, support at 46,100, with 45,900–46,000 and 45,500 as zones. Resistance at 46,400 and 46,500 may lead to 46,700 on cyclical flows.

* Russell 2000 (RTY Futures): At 2,466, support at 2,450, with 2,430–2,440 and 2,400 deeper. Resistance at 2,480 and 2,500 opens paths to 2,525+ on small-cap fervor.

Breakouts above resistances could extend gains on strong earnings; breaches below supports may spark risk-off dips.

ETF Options Chain Insights

Options flow reflects post-Fed exuberance, with volume spiking on weekly expirations (September 26, 2025) amid hedging for earnings. Implied volatility ticks up to 10-15% ATM, with put skew signaling caution on tariffs. Key high open interest strikes:

* SPY (S&P 500): Closed ~666. Calls at 670 (high OI ~8,500, vol 45,000, IV ~6.5%) indicate upside bets; puts at 660 (OI ~7,200, vol 32,000, IV ~8.2%) show hedging. Mild call bias amid records.

* QQQ (Nasdaq 100): Closed ~599. Calls at 600 (OI ~2,100, vol 52,000, IV ~10.2%) reflect tech bets; puts at 590 (OI ~6,500, vol 40,000, IV ~12.5%) highlight valuation guards. Elevated put volume on skew.

* DIA (Dow Jones): Closed ~463. Calls at 465 (OI ~4,000, vol 200, IV ~9.8%) suggest cyclical plays; puts at 460 (OI ~900, vol 500, IV ~11.0%) point to balanced flows. Call edges out on rate relief.

* IWM (Russell 2000): Closed ~246. Calls at 250 (OI ~1,800, vol 5,200, IV ~15.1%) show breakout hopes; puts at 240 (OI ~3,100, vol 3,500, IV ~17.3%) reflect rate sensitivity. Higher IV on puts amid rotation.

Call volume nudges ahead, but OTM put skew flags protection—geared for earnings-driven swings.

Economic Events to Watch This Week

Earnings take center stage, with consumer and tech reports testing the soft-landing thesis. Key highlights:

* Monday, September 22: No major releases; Fed speakers gauge rate path.

* Tuesday, September 23: Consumer Confidence (10:00 ET), New Home Sales (10:00 ET). Housing rebound in spotlight.

* Wednesday, September 24: Durable Goods Orders (8:30 ET), GDP Q2 Final (8:30 ET); Fed speeches continue.

* Thursday, September 25: Jobless Claims (8:30 ET), Existing Home Sales (10:00 ET).

* Friday, September 26: PCE Price Index (8:30 ET), core PCE forecast at 0.2% MoM; Michigan Sentiment Final (10:00 ET).

Global tariff updates linger, but U.S. earnings dominate—beats could fuel rallies, misses amplify volatility.

Outlook for the Week

The Fed's easing cycle anchors sentiment, positioning the S&P 500 and Nasdaq 100 for 10-15% year-end upside if earnings align with 7% EPS growth forecasts. Dow eyes 9-10% gains on cyclicals, while Russell 2000, at a 27% valuation discount, targets 2,500+ on rotations. Bullish above key supports with earnings catalysts; bearish on tariff escalations probing deeper levels. Options lean hedged—expect spikes around reports.