Major United States benchmarks finished Wednesday (Thursday AEDT) in mixed territory after Federal Reserve Chair Jerome Powell signalled that the central bank might not lower interest rates again this year.
The Dow Jones Industrial Average fell 74.37 points, or 0.2%, to 47,632.00. The S&P 500 slipped 0.3 points to close at 6,890.6, while the Nasdaq Composite rose 131 points, or 0.6%, to a record 23,958.5, buoyed by rallying Nvidia shares.
The Fed earlier cut its benchmark overnight borrowing rate by a quarter percentage point to a range of 3.75%-4%, marking its second reduction of 2025.
Before the decision, markets had largely priced in another cut for December, but Powell’s comments cast doubt on that outlook.
Powell said in his opening statement that there were “strongly differing views about how to proceed in December” among policymakers. “A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it,” he said.
Rate-sensitive consumer stocks led declines, with Costco down 1.3% and McDonald’s declining 1.3%.
Still, Powell left the door open for flexibility, noting that inflation was not far from the Fed’s 2% target. “What to do at the December meeting is still in the air,” he said.
Meanwhile, megacap technology stocks extended their gains. Nvidia surged 3.1%, becoming the first U.S. company to reach US$5 trillion market capitalisation.
The rally followed news of several new deals, including a $1 billion investment in Finnish networking firm Nokia.
In corporate results, Caterpillar reported third-quarter earnings that exceeded expectations, sending its shares up 11.6%.
After Wednesday’s close, Alphabet, Meta Platforms, and Microsoft reported quarterly results, with Apple and Amazon due on Thursday.
Investors also kept a close eye on President Donald Trump’s meeting with Chinese President Xi Jinping in South Korea.
On the bond markets, the 10-year Treasury yield climbed 2.5% to 4.07%, while the 2-year yield rose 3% to 3.596%, reflecting shifting expectations for the Fed’s next move.
