New york: The New York Stock Exchange ended the midweek on a mixed note after the Federal Reserve cut the policy rate by 25 basis points, while Chair Jerome Powell made it clear that another rate cut at the December meeting is "far from a foregone conclusion."
According to Anadolu Agency, the Dow Jones was down 0.16%, or 74.37 points, to close at 47,632. On the other hand, the Nasdaq rose 0.55%, or 130.98 points, to close at 23,958.47, while the S and P 500 was mostly flat at 6,890.59 points.
The mixed course followed the Fed's decision to cut the federal funds rate by 25 basis points to 3.75%-4%, as well as Powell's reservations about a further rate cut this year. The central bank said in the monetary policy statement that the downside risks to employment have risen in recent months and that inflation has moved up since earlier in the year and remains "somewhat" elevated. In addition, the central bank stated that it has decided to end the balance sheet reduction process as of December 1.
At the post-meeting press conference, Powell expressed doubts on Wednesday about a further policy rate cut at the central bank's December meeting, contrary to market expectations, saying it "is not a foregone conclusion, far from it." Powell highlighted strongly differing views within the committee regarding the December meeting, indicating the uncertainty surrounding any future rate cuts.
While there is still a blackout for government data releases due to the ongoing federal government shutdown, Powell said the central bank will continue to obtain some economic information from sources other than government data. However, Powell added that high uncertainty could influence the outcome of the December meeting. He also mentioned a 'growing chorus' among the 19 Fed officials to 'at least wait a cycle' before cutting again.
On the corporate side, Nvidia's shares climbed 3%, making it the first company in history to reach a $5 trillion market value. This rise followed announcements by CEO Jensen Huang about significant orders for AI chips and plans for new supercomputers. Nvidia also revealed a $1 billion stake in Nokia to develop 6G cellular technology.
Boeing shares fell more than 4% after reporting a nearly $5 billion charge related to delays in the 777X jet program. Meanwhile, Verizon, reporting better-than-expected profits, saw its shares gain more than 2%.
Meanwhile, Republicans and Democrats have yet to reach a budget agreement, four weeks into the US federal government shutdown. On the trade front, the outcome of US President Donald Trump's meeting with Chinese President Xi Jinping in South Korea is eagerly awaited.