The Ultimate Guide to Investing in the Stock Market: Fed's Jumbo Cut and Market Reactions
In a surprising move, the Federal Reserve delivered a larger 50 basis point rate cut, ending the S&P 500's seven-day winning streak. The market reacted with choppy trading, causing the benchmark to fall by 0.3%, the tech-heavy NASDAQ to slip by 0.3%, and the Dow Jones to fall by 0.3% as well.
The Federal Reserve's decision to cut interest rates by 50 basis points marks the first cut since March 2020. The central bank also hinted at further rate cuts this year, signaling the start of a rate-cut cycle to support the economy amidst inflation concerns.
Market expectations were divided on whether the Fed would opt for a 25bps or 50bps cut, with the central bank ultimately choosing the latter. Capital Economics described the decision as "hawkish 50bps," noting that it wasn't a unanimous decision and that the Fed anticipates only one more 50bps cut by the end of the year.
In other news, United States Steel saw a surge in its stock price after reports of Nippon Steel extending its review of a $14.1 billion deal with the company. Intuitive Machines Inc also experienced a significant jump of 38% following a $5 billion contract win from NASA for lunar communications and navigation services. Additionally, Victoria's Secret & Co. saw a 3% increase in its stock price after a positive rating upgrade from Barclays.
In conclusion, the Federal Reserve's rate cut and market reactions highlight the importance of staying informed and adaptable in the ever-changing world of investments. Keep an eye on central bank decisions, market trends, and company news to make informed decisions about your finances.