The US Federal Reserve lowered its key interest rate for the first time in 2025 this week, while the Bank of Canada resumed cutting after pausing in March, providing a boost to growth-oriented sectors.
Tech stocks, particularly semiconductor and artificial intelligence (AI) companies, responded positively, reflecting investor optimism about a more supportive monetary environment for tech sector growth.
Fed Chair Jerome Powell cautioned that the cut was a risk-management move motivated by concerns over the labor market’s softness and persistent inflation risks, rather than a sign of strong economic confidence. He highlighted that downside risks to employment have increased, and that inflation remains above the Fed’s 2 percent goal.
Likewise, Bank of Canada Governor Tiff Macklem warned that broad-based tariffs and trade tensions pose structural risks to the Canadian economy. He emphasized that, unlike the pandemic bounceback, Canada will not see a quick economic rebound if tariffs persist, as they could permanently lower output and weaken growth across key sectors.
Nasdaq-100 performance, September 12 to 19, 2025.
Chart via Nasdaq.
Against that backdrop, the Nasdaq-100 (INDEXNASDAQ:NDX) put on a strong performance this week, closing at 24,626.25 on Friday (September 19), up 0.7 percent. The index saw momentum build toward the end of the week, supported by growth in technology and semiconductor stocks.
NVIDIA to take US$5 billion stake in Intel
While the Fed’s decision was a key factor for the tech sector this week, a landmark deal stole the spotlight.
A strategic partnership between NVIDIA (NASDAQ:NVDA) and Intel (NASDAQ:INTC) dominated the news cycle on Thursday (September 18), sending shockwaves through the semiconductor industry.
In a historic move, NVIDIA announced a US$5 billion investment in Intel as part of a new partnership. The companies will collaborate on custom data center and PC products, aiming to jointly develop custom CPUs and GPUs by integrating NVIDIA’s AI and accelerated computing technologies with Intel’s x86 platforms for data centers and personal computing.
The deal marks a major realignment in the chip industry focused on AI infrastructure innovation. Shares of both companies finished the week higher, with Intel notching a notable 21 percent increase.
Semiconductor exchange-traded funds (ETFs) also surged in response to the NVIDIA-Intel partnership announcement, with the iShares Semiconductor ETF (NASDAQ:SOXX) gaining 4.17 percent, the Invesco PHLX Semiconductor ETF (NASDAQ:SOXQ) rising 3.93 percent and the VanEck Semiconductor ETF (NASDAQ:SMH) increasing 3.92 percent over the course of the week, reflecting strengthened investor confidence across the sector.
Semiconductor ETF performance, September 16 to 19, 2025.
Chart via Google Finance.
The Intel-NVIDIA collaboration comes after reports this week that China’s regulatory authority has instructed major tech firms like Alibaba (NYSE:BABA) and ByteDance to stop buying and cancel orders of NVIDIA’s AI chip designed for China. The news sent NVIDIA shares down early in the week, but the company ended the period flat.
The collaboration also helped provide a much-needed boost to Intel’s share price. The company has struggled with operational challenges and a difficult turnaround effort in the highly competitive semiconductor market.
In a direct reaction to the Intel-NVIDIA deal, shares of Advanced Micro Devices (NASDAQ:AMD) and Taiwan Semiconductor Manufacturing Company (NYSE:TSM) declined on Thursday.
The latter company recovered some of its losses on Friday.
Advanced Micro Devices and Taiwan Semiconductor Manufacturing Company performance, September 16 to 19, 2025.
Chart via Google Finance.
US and UK sign tech prosperity deal
In other tech news, the US and UK signed a memorandum of understanding on Friday, pledging to boost collaboration in science and tech. Called the Technology Prosperity Deal, the arrangement focuses on civil nuclear power, aiming for independence from Russian fuel by late 2028 and developing new tech like small modular reactors.
The agreement also establishes joint task forces for AI standards and security, as well as quantum computing breakthroughs, and explores civil maritime nuclear applications.
Tech news to watch next week
Next week, investors will have an eye on Micron Technology’s (NASDAQ:MU) fiscal Q4 results, scheduled to be released on September 23 after market close. Analysts are estimating revenue of around US$11.15 billion.
Accenture (NYSE:ACN), a professional services company, will also release its fiscal Q4 results next week on September 25, with revenue expected in the US$17 billion range.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.