Balancing plasticity and stability in neural circuits is essential for an animal's ability to learn from its environment while preserving the proper processing and perception of sensory information. However, unlike the mechanisms that drive plasticity in neural circuits, the activity-induced molecular mechanisms that convey functional stability remain poorly understood. Focusing on the visual cortex of adult mice and combining transcriptomics, electrophysiology and 2-photon imaging, we find that the daily appearance of light induces in excitatory neurons a large gene program along with rapid and transient shifts in the ratio of excitation and inhibition (E/I-ratio) and ongoing neural activity. Furthermore, we find that the light-induced transcription factor NPAS4 drives these daily normalizations of E/I-ratio and neural activity rates and that it stabilizes the neurons' response properties. These findings indicate that daily sensory-induced transcription normalizes E/I-ratio and drives downward Firing Rate Homeostasis to maintain proper sensory processing and perception.