Global markets Wall Street hit new records after Fed rate cut.
Global stock indices reached all-time highs, but trading on Wall Street ended mixed after the Federal Reserve announced a rate cut, signaling a cycle of monetary easing ahead.
The Federal Reserve lowered interest rates by 0.25 percentage points and signaled that it plans to continue easing borrowing costs gradually through the rest of the year. The move was not unanimous: Stephen Miran, the newest member of the Board of Governors, argued for a larger half-point reduction.
Market Response Wall Street
On Wall Street, the Dow Jones Industrial Average added 0.57%, closing at 46,018.32. In contrast, the S&P 500 dipped 0.10% to 6,600.35, while the Nasdaq slipped 0.32% to 22,261.33.
Globally, the MSCI World Index briefly reached an all-time high of 979.61 before giving up gains and ending down 0.10% at 975.84. Europe’s STOXX 600 index edged lower by 0.03%.
Investors noted that expectations were overly optimistic before the Fed’s decision. “The market was already overheated, so some profit-taking seemed natural,” said Mark Malek of SiebertNXT.
Bond Yields and the Dollar
Treasury yields initially fell, but after Jerome Powell’s press conference, they rose again. The yield on 10-year bonds rose to 4.072%, 2-year bonds to 3.51%, and 30-year bonds rose to 4.669%.
Powell noted that the most dire inflation forecasts are no longer relevant. According to him, tariffs could lead to a short-term price increase, but will not put significant pressure on the economy.
The dollar strengthened against major currencies: by 0.27% against the yen (146.87) and by 0.36% against the franc (0.788). The euro fell by 0.38% to $1.1822. The dollar index rose by 0.35% to 96.96.
Commodity Markets
Gold hit a new record, reaching $3,707.40 per ounce, but later fell to $3,659.10. US December gold futures fell by 0.2% to $3,717.80.
Oil prices fell after the release of data showing a rise in US diesel inventories. Brent fell 0.76% to $68.22 per barrel, WTI fell 0.73% to $64.05.
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