Major United States benchmark averages ended Wednesday’s session (Thursday AEST) with a mixed performance after the Federal Reserve delivered a widely anticipated quarter-point rate cut but signalled a cautious approach to future policy easing.
The Dow Jones Industrial Average gained 260.4 points, or 0.6%, to finish at 46,018.3, notching a new intraday record. The S&P 500 edged lower by 6.4 points, or 0.1%, to 6,600.4, while the Nasdaq Composite slipped 72.6 points, or 0.3%, to 22,261.3.
High-growth technology names weighed on the market, with Nvidia down 2.6%, Oracle falling 1.7%, Palantir down 1.1% and Broadcom declining 3.8%.
In contrast, rate-sensitive stocks lifted the Dow, with Walmart and JPMorgan adding 0.8% apiece, and American Express advancing 2.7%.
The Federal Open Market Committee voted 11-1 in favour of reducing the federal funds rate by 25 basis points, setting the target range at 4%-4.25%.
Policymakers also signalled that two further cuts are expected before year-end.
In its statement, the Fed acknowledged slowing momentum in the labour market, noting that “job gains have slowed, and the unemployment rate has edged up but remains low”.
It also highlighted that economic activity has “moderated” and inflation “has moved up and remains somewhat elevated”.
Fed Chair Jerome Powell told reporters that the decision was best described as a “risk management cut”, suggesting the move was intended as insurance against potential economic weakness rather than the beginning of a sustained easing cycle.
Analysts at ANZ said in a client note: “All told, we’d describe the decision and tone of the press conference as balanced and restrained, and not at all dovish.”
On the bond markets, the yield on the 10-year Treasury rose 1.4% to 4.087%, while the 2-year yield gained 1.2% to 3.553%.
