FX.co ★ US Stocks Whipsaw After Fed Rate Cut

On Wednesday, US stocks experienced volatility following the Federal Reserve's decision to reduce its benchmark interest rate by 25 basis points, an outcome that had been broadly anticipated. The Fed also signaled two additional rate reductions over the course of the year. The S&P 500 and Nasdaq 100 saw slight decreases, yet traditional economic sectors buoyed the Dow, pushing it up by over 300 points. The Federal Open Market Committee's (FOMC) forecasts suggested that real economic growth and unemployment figures have improved since the June meeting, alleviating fears over the detrimental effects of tariffs despite recent unemployment data indicating slower job growth. Nonetheless, higher projections for Personal Consumption Expenditures (PCE) inflation next year cast doubt on the need for a more aggressive approach to rate cuts. Among the session's leaders were consumer staples and credit services, with companies like Procter & Gamble, Philip Morris, and American Express gaining 2%. Conversely, Nvidia and Broadcom declined by 2.5% and 4% respectively, following reports that China's internet regulator had prohibited the nation's largest tech companies from acquiring these firms' AI chips.