US stocks surge to fresh all-time highs as the Russell 2000 catches up. The US dollar rebounds on a dovish BoE but is muted by a hawkish BoJ twist.
US small-cap stocks rallied to a record high, JPY trims losses with BoJ’s hawkish twist
The US stock market continued to bask in a jubilant mood ex-post FOMC, as the S&P 500 looks set to end this week with a third consecutive weekly gain as it extended its rally by 0.5% on Thursday, 18 September.
Interestingly, the limelight was on the small-cap Russell 2000, which outperformed with a gain of 2.5% and finally smashed above its prior all-time high of 2,459 printed in November 2021, with a new record close of 2,468. The Russell 2000 has finally made a fresh all-time high after lagging its peers in the past 10 months.
The technology-heavy Nasdaq 100 recorded a rally of 0.9% reinforced by a positive news flow surrounding the US semiconductor industry, where AI juggernaut Nvidia announced a $5 billion investment into Intel, and the two will co-develop chips for PCs and data centres.
In the FX market, the US dollar rebounded for the second consecutive day on Thursday, !8 September, with the US Dollar Index recording an intraday gain of 0.4% reinforced by weakness seen in the sterling after the Bank of England (BoE) left its short-term policy interest rate unchanged at 4% as expected.
BoE Governor Bailey made a dovish comment to the media that the BoE is not done cutting interest rates, while highlighting that inflation is an upside risk in the UK. The GBP/USD ended Thursday’s US session with a loss of -0.5%, its worst single-day decline since 2 September 2025.
In today’s Asian session, the US dollar's strength has been muted due to the Bank of Japan (BoJ)’s hawkish twist after it left its short-term policy unchanged at 0.5% as expected.
The latest BoJ’s monetary policy decision to hold interest rates steady was not unanimous, as two officials dissented for the first time since 2025 in favour of a 25 bps hike, citing that price stability in Japan has been achieved, and the risks to prices becoming more skewed to the upside.
The Japanese yen trimmed its overnight losses, and it is now gaining by 0.2% against the US dollar at the time of writing.
Gold (XAU/USD)’s prior two days of losses are showing signs of a pause as it rebounded by 0.2% to a current intraday level of US$3,653, just a whisker above a short-term key support zone of US$3,644/3,620.
Our YouTube video above contains more insights and the latest intraday technical analysis on our Chart of the Day, Gold (XAU/USD).
