The 50 BP Cut – US Market Wrap

Stocks fell as Jerome Powell said the Federal Reserve is not in a rush to ease policy after cutting rates by a half-point.

The S&P 500 wiped out a gain of as much as 1% as the Fed chief cautioned against assuming big rate cuts would continue. Treasury 10- year yields advanced seven basis points to 3.71%. The dollar rose.

Following the Fed’s two-day meeting, projections revealed that a small majority, 10 of 19 officials, favoured decreasing rates by at least a half-point over the next two meetings in 2024. According to their median prediction, policymakers planned to cut an additional percentage point in 2025.

The S&P 500 fell 0.3%. The Nasdaq 100 dropped 0.5%. The Dow Jones Industrial Average lost 0.2%. A gauge of the “Magnificent Seven” megacaps slid 0.1%. The Russell 2000 of small firms was little changed.