Global markets have been on quite a ride lately, swinging between optimism and caution as central banks make pivotal moves. Following the Federal Reserve’s much-anticipated rate cut, stocks have been responding dynamically.
US Markets React to Fed’s Rate Cut
On 17 September 2024, the Federal Reserve lowered interest rates by a quarter of a percentage point, indicating an easing cycle for borrowing costs. Most analysts were surprised by the dissenting opinion of new Governor Stephen Miran, who favoured a more aggressive half-percentage point cut. This decision sent ripples across major stock indices:
- Dow Jones Industrial Average: +0.56% to close at 46,014.88
- S&P 500: -0.31% to 6,585.98
- Nasdaq Composite: -0.75% to 22,162.03
Meanwhile, global stocks faced a slight dip, as MSCI’s index fell 0.14% to a value of 975.41.
Nvidia and Intel Make Waves in the Tech Sector
The atmosphere shifted dramatically on 18 September 2024, with stocks climbing as tech shares, led by Nvidia, captured investor attention. Nvidia announced a US$5 billion investment into Intel, resulting in a significant surge for tech shares:
- Intel: +23%
- Nvidia: +3%
This partnership aims to jointly develop chips for PCs and data centres, which investors see as a positive step for Intel as it works to regain its competitive edge.
Global Market Trends
The boost from the tech sector was felt broadly, even impacting European markets:
- ASML (Netherlands): +7%
- German Stocks: Rising about 1%
Despite a mix of results in the semiconductor sector across the US, market analysts reported a confident sentiment following the Fed’s rate cut, with many expecting further cuts to come later in the year.
Looking Ahead
As the Federal Reserve navigates this shifting landscape, the job market remains a focal point, overshadowing persistent inflation concerns. Investors are keen to see how decision-makers will respond in upcoming meetings, creating a cautious yet hopeful atmosphere in the markets.