- The Dow Jones oscillated as the Federal Reserve cut interest rates, and Jerome Powell indicated that inflation pressures remain “muted.”
- On the trade war front, disappointment hit the Dow as the APEC summit in Chile was canceled, removing hopes for Trump to sign a trade deal there with Xi Jinping.
- Stocks got a boost from Steven Mnuchin’s claim that a November deal was still likely.
The Dow Jones swung between gains and losses on Wednesday after the Federal Reserve cut interest rates by 0.25%. The removal of the phrase “act as appropriate” from the formal policy statement initially dented the Dow, as investors viewed this as a sign the Fed may be done easing. Stocks eventually regained their footing when Fed Chair Jerome Powell took the stand.
Dow Jones Seesaws in Wake of Fed’s Third Rate Cut
All three major US stock market indexes advanced in late afternoon trading, despite careening toward losses in the immediate aftermath of the Fed decision.
The Dow Jones Industrial Average outperformed, rising 83.45 points or 0.31% to 27,154.87. The S&P 500 rose 0.24%, and the Nasdaq climbed 0.26% to round out a positive day for US stocks.
The Dow Jones swung between gains and losses as the Federal Reserve delivered a hawkish interest rate cut. | Source: Yahoo Finance
The Federal Reserve’s “hawkish interest rate cut” decision was largely what markets expected, though the policy statement still indicated concerns about the outlook for global trade and investment.
Commodities sold off in response to the rate cut. Both crude oil and the gold price were hurt by a surging US dollar.
Bucking the trend for global central banks,