close
close

Stock market today: Dow rises 100 points after Fed's historic 50 basis point rate cut

The most read books of Wednesday

Here are the most important news about stock trading on Wednesday:

History shows that the Fed’s rate cut is a gamble for stock market traders

The US economy is strong by one measure. Why the Fed will cut borrowing costs anyway

An alternative version of the S&P 500 has beaten its more popular sibling back to record highs

Cboe Volatility Index

VIX (Cboe indices)

USA 10 years

BX:TMUBMUSD10Y (XTUP)

US Dollar Index (DXY)

DXY (USA: ICE Futures US)

Crude oil

Class 1 (NYM)

Gold perpetual contract

GC00 (NYM)

BitcoinUSD

BTCUSD (Kraken)

DJIA

DJIA (Dow Jones Global)

Nasdaq

COMP (Nasdaq)

S&P500

SPX (S&P US)

Last update

Just came in

Citi: Stock prices tend to be weak in the short term after the Fed's first interest rate cut

From

Joseph Adinolfi

(CITI)

Regardless of the size of the Federal Reserve's interest rate cut on Wednesday, there is a chance that investors will be disappointed.

However, many market observers are already emphasizing that Chairman Powell's rhetoric during the press conference as well as the details of the central bank's latest forecasts may ultimately be of greater importance to the markets.

Still, anyone who insists on considering the initial market reaction should take a look at the chart above from Citi's Global Quantitative Macro team.

Over the longer term, stock performance in the months following the start of an easing cycle tended to depend on whether or not the U.S. economy was in recession.

This suggests that the S&P 500 has historically experienced a sell-off in the days following the first interest rate cut.

Major US stock indices jumped after the Fed announced a 50 basis point interest rate cut.

In this excitement, the S&P 500 briefly reached a new all-time high. The index reached 5,689.75, surpassing its previous intraday high of 5,670.81.

The index fell back shortly after reaching this record, but if it recovers and closes above 5667.20, it would be the index's 39th record close this year.

The last time the S&P 500 closed at a record high on the same day that the Fed announced a rate cut was on January 31, 1996.

U.S. Treasury yields remained stable on Wednesday as traders digested the Federal Reserve's decision to cut interest rates by half a percentage point and its willingness to consider further adjustments.

The yield on 2-year bonds remained little changed at 3.59 percent shortly after the Fed's announcement, while yields on 10- and 30-year Treasury bonds continued to rise during the day, according to data from FactSet.

Gold futures rose in electronic trading on Wednesday after the U.S. Federal Reserve cut its benchmark interest rate by 50 basis points, or half a percentage point, citing confidence that inflation would continue to fall and noting that labor market conditions had weakened.

Gold for December delivery rose 0.7% to $2,610.20 an ounce in recent trading.

Bitcoin price rose 1.2% after the US Federal Reserve decided to cut its benchmark interest rate by half a percentage point, the first cut in over four years.

According to Dow Jones Market Data, the largest cryptocurrency is currently trading at around $60,475, still 18 percent below its record high of $73,798 reached in March.

U.S. stocks rose after the Federal Reserve cut its benchmark interest rate by 50 basis points to a range of 4.75 percent to 5 percent, the first rate cut in over four years and marking the start of a cycle of monetary easing in the world's largest economy.

The Dow Jones Industrial Average rose more than 250 points, or 0.6%, to around 41,828 points at 2:03 p.m. Eastern Time, according to FactSet data.

The S&P 500 rose 0.8% to 5,673.

The Nasdaq Composite rose 0.9% to close at 17,796.

A small wave of refinancing has broken out among borrowers who had the highest mortgage interest rates over the past twelve months.

While lower 30-year fixed-rate mortgages can only help a small portion of the overall U.S. mortgage market, the Federal Reserve is expected to cut interest rates this afternoon for the first time in four years.

This has led to the development of a fund that invests in mortgage bonds – a backbone of US housing finance.

Here is the 8% return for investors betting on the real estate market

Home equity loans appear to be a good investment for investors, especially given rising yields amid the Fed's interest rate-cutting plans, says Clayton Triick of Angel Oak Capital Advisors.

Read the full article

Palantir shares rose only slightly in Wednesday trading, but could still pull off a remarkable feat: Any rise would be the ninth in a row, according to Dow Jones Market Data, making it the stock's longest winning streak in history.

What has been driving the momentum in recent weeks? For one, the company has been winning AI deals and customers. The software company signed a “multi-year, multimillion-dollar deal” with Nebraska Medicine, which was announced earlier this week. Additionally, Palantir shares will be added to the S&P 500 on September 23 as part of the index's rebalancing.

Palantir shares are often volatile, but are up 21.3% in the current price increase.

Bitcoin prices fell early Wednesday afternoon, ahead of the U.S. Federal Reserve's expected first interest rate cut in four years.

The largest cryptocurrency was trading 2% lower at around $59,791, according to CoinDesk data. It is about 19% below its record high of $73,798 reached in March, while still up 42.3% year-to-date.

Investors will be closely watching whether the Fed cuts interest rates by 25 or 50 basis points, as the central bankers' decision is expected to be announced at 2 p.m. Eastern Time.

US stocks traded in a narrow range and showed little change during the day as investors remained cautious about the US Federal Reserve's interest rate announcement.

The S&P 500 fluctuated between slight gains and losses at around 5,635 points. The Dow Jones Industrial Average, meanwhile, was able to mitigate its earlier losses and the Nasdaq Composite was only slightly lower at around 17,625 points.

You may also like...