So how did the markets perform?

The S&P 500 and the Nasdaq stock indexes are on track to have their third consecutive week of gains. This positive trend was fueled by the Federal Reserve’s first interest rate cut of 2025 and hints that more relaxed monetary policies could be on the way. A renewed sense of optimism around stocks related to artificial intelligence (AI) also contributed to the market’s rise.

However, the US stock market was a bit unsteady earlier in the day. Investors were still trying to understand the Fed’s future plans and were paying close attention to comments made by Stephen Miran, the newest Fed governor and a White House economic adviser, who spoke on CNBC on Friday morning.

Also on Friday, US President Donald Trump and Chinese President Xi Jinping spoke on the phone, and afterward, Trump announced that they had made progress on a deal for TikTok. He also said that the two leaders had agreed to a meeting in person next month in South Korea.

So far in September, the three main US stock indexes—the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite—are all performing well. This is unusual because September has historically been a difficult month for the US stock market. Data shows that since the year 2000, the S&P 500 has, on average, lost 1.4% of its value during this month.

Most Read: Post-FOMC US dollar surge shifts global markets – DXY outlook

How has the US Dollar Reacted?

The US Dollar has been resilient since the decision and not surprising considering that what the Fed delivered was more hawkish than expected.

For the Fed decision impact, read Caution Over Speed: How the Fed Framed Its First Cut

However, the Fed met expectations by announcing its first rate cut of the year and indicating there would be two more cuts. This caused the dollar to immediately drop by about 0.5% against other currencies.

But within half an hour, the dollar had regained all of its lost value as US government bond yields started to rise again. This quick reversal was likely due to how traders were positioned in the market, rather than a change in how they viewed the Fed’s announcement. It was a “trader’s market”—meaning it was influenced more by short-term trading behaviors than by long-term economic signals.

The US Dollar index (DXY) is ending the week with 3 successive days in the green.

US Dollar Index Daily Chart, September 19, 2025