According to the Wise Financial APP, the US stock market is currently experiencing a steady upward trend in September, while typically this month is a weak-performing month. However, after the Fed announced a significant rate cut, the market reversed this seasonal trend.

Although the S&P 500 index slipped slightly on Friday, it has risen for the third consecutive week, resulting in a 1.6% cumulative increase in September. According to FactSet data, if this rate is maintained on the last trading day of September, the S&P 500 index will record its first increase in September since 2019.

Anthony Saglimbene, Chief Market Strategist at Ameriprise Financial, stated in a phone interview on Friday: "The expectation of a soft landing is already fully reflected in stock prices." He mentioned that September is usually a weaker performing month, but this "seasonal factor" did not come into play after the significant rate cut by the Fed.

On September 18, the Fed announced a half percentage point cut in the benchmark interest rate, starting a new round of rate cuts. Fed Chairman Powell stated that this rate cut is based on a significant easing of US inflation and the need to maintain labor market stability.

The latest data released on Friday shows that the US personal consumption expenditure price index (PCE) annualized growth rate dropped to 2.2% in August. After the inflation data was released, interest rates in the US bond market declined, bond yields fell, and the Federal Fund futures' expectations indicate an increased likelihood of another significant rate cut by the Fed in November.

According to Dow Jones market data, the yield on two-year US Treasuries fell to 3.562% on Friday, marking the longest continuous four-week decline since December 2020. The ten-year Treasury yield also slipped to 3.751%. Throughout September, US Treasury yields generally declined as investors anticipate the Fed's rate cut to begin this month.

According to CME FedWatch tool data, as of Friday, the federal funds futures market indicates a 54.8% chance that the Fed will cut the benchmark interest rate by half a percentage point at the November policy meeting, with a 45.2% chance of a smaller quarter-point rate cut.

Cyclical stocks leading technology stocks.

Investors will continue to focus on data such as inflation, economic growth, and corporate profits, which are crucial for further market gains. Saglimbene stated, "Investors want to see the breadth of the rally widen." He also mentioned that the recent strong performance of cyclical stocks is a good example.

In the past three months, the materials, industrial, and financial sectors of the S&P 500 index have outperformed the technology sector, indicating that as the US economy continues to grow, cyclical stocks are leading the market. According to FactSet data, the industrial sector of the S&P 500 index has risen by 10.7% in the past three months, the materials sector by 9.8%, and the financial sector by 10.3%. In contrast, the technology sector only rose by 0.4% during the same period.

This shift in market leadership is particularly evident as the technology sector has gained nearly 29% since 2024, driving the S&P 500 index up by 20.3% year-to-date.

This week, the materials sector of the S&P 500 index rose by 3.4%, marking its largest weekly gain since December last year. The technology sector rose by only 1.1% this week, while the S&P 500 index as a whole rose by 0.6% this week.

Saglimbene stated that the signs of cooling inflation, ongoing growth in the usa economy, and the significant rate cut by the Federal Reserve in September have brought new momentum to the expectation of a "soft landing". He also pointed out that third-quarter corporate earnings will begin to be released next month, which will be crucial for the market to determine whether the stock market can continue to rise.

The Dow Jones Industrial Average rose 0.3% on Friday to a new high, while the S&P 500 index fell 0.1% and the Nasdaq Composite Index fell 0.4%. According to Dow Jones market data, the three major U.S. stock indexes have risen for the third consecutive week.