Thread: Daily Market Analysis from ForexMart

Apple Slows Down, Boeing Takes Off: How Are Trends Changing?

Wall Street Gains After Selloff
The key U.S. stock indexes posted solid gains of more than 1% on Monday as market participants looked for bargains after last week's big selloff. Investors' expectations were also focused on upcoming inflation data and Federal Reserve decisions to be announced in the coming days.

Last Week's Slide and Why It Mattered
It was a tough week for investors, with Friday's reports showing weaker-than-expected employment data for August. This followed disappointing manufacturing data released on Tuesday, which sent the Nasdaq Composite (.IXIC) to its biggest weekly loss since January 2022, while the S&P 500 (.SPX) posted its biggest decline since March 2023.

Awaiting key data and decisions
Amid uncertainty and new economic data, market participants continue to brace for potential volatility from the release of fresh inflation data and the Federal Reserve's monetary policy decision, which could significantly impact the future direction of markets.

Investors bet on recovery: Wall Street in positive territory
Wall Street indices confidently moved higher on Monday, with the Dow Jones Industrial Average (.DJI) adding 484.18 points, or 1.20%, to 40,829.59. The S&P 500 (.SPX) rose 62.63 points, or 1.16%, to end at 5,471.05, while the Nasdaq Composite (.IXIC) gained 193.77 points, or 1.16%, to end at 16,884.60.

Awaiting Economic and Political News
Investors are focused this week on the Consumer Price Index (CPI) release, which is expected Wednesday morning, the day after the first presidential debate between Democrat Kamala Harris and Republican Donald Trump. The debate and economic data could set the tone for the market ahead of the November 5 election.

'High-Quality Stocks' Are Back in Focus
Phil Blancato, chief market strategist at Osaic Wealth in New York, says investors are actively looking at "high-quality stocks that are now available at attractive prices." Among such holdings, Blancato singled out Nvidia (NVDA.O), a leader in the market for artificial intelligence chips. The company's shares rose 3.5% on Monday after a sharp 15.3% drop the previous week.

Experts Caution
Despite the current gains, Blancato is concerned about the rally continuing ahead of a key inflation report. Wednesday's CPI data could play a key role in the Federal Reserve's decision on interest rates. Investors are hoping for a "soft" reading that could confirm further rate cuts by the Fed — by 25 or 50 basis points.

"But what if it doesn't?" — Blancato warns, noting that any unexpected Fed move could trigger serious market volatility.

Fed Fears: A Dilemma on the Horizon
Investors are bracing for either scenario: Some will be disappointed if the Fed decides to cut rates by just 25 basis points, while others will be worried if the cut is more significant — up to 50 basis points. This could indicate serious concerns on the part of the regulator about the state of the economy. "It turns out that either way, it's not a win-win situation," one market strategist noted.

Inflation Data: Expectations and Forecasts
Wednesday's inflation report is expected to show a slowdown in headline price growth in August to 2.6% year-on-year, with the monthly figure likely to remain unchanged at 0.2%. The consumer price inflation (CPI) data will be followed by the producer price report on Thursday, which will also be closely analyzed by the market.

Apple underwhelms: a poor start with the new iPhone
Shares of Apple Inc (AAPL.O) were little changed on Monday, closing with a minimal gain of 0.04%, despite an earlier loss of almost 2%. Investors showed little enthusiasm for the launch of the new iPhone 16 with artificial intelligence features, which the company presented earlier in the week.

S&P 500 Sectors in the Green: Consumer Staples, Industrials Lead the Way
All 11 major sectors of the S&P 500 ended the day in the green. Consumer staples led the gains, up 1.63%, followed by industrials, which added 1.56%. Communications companies were the weakest performers, up just 0.04%.

Tech Competition: Apple vs. Huawei
Apple's unveiling of its new phone came hours after Chinese tech giant Huawei (HWT.UL) began accepting pre-orders for its triple-phone Mate XT, adding intrigue to an already intense standoff between the two tech giants.

Boeing's Gain: Avoiding a Strike

Boeing (BA.N) shares jumped 3.4% after the company and its largest union reached a tentative agreement covering more than 32,000 workers. This helped prevent an impending strike, which had a positive impact on investor sentiment.

Palantir and Dell Technologies: Gains on S&P 500 Upgrades
Palantir (PLTR.N) jumped 14% and Dell Technologies (DELL.N) gained 3.8% after it was announced that they would be added to the S&P 500 index on Sept. 23. The move prompted investor buying and strengthened the companies' positions in the market.

American Airlines and Etsy Lose Index Spots
As a result of the S&P 500 changes, American Airlines Group (AAL.O), which rose 3.9%, and Etsy (ETSY.O), which fell 1.6%, will be removed from the index. Bio-Rad Laboratories (BIO.N), which ended the day down 2%, will also be removed.

Trading Volumes: Activity on U.S. Exchanges
A total of 10.75 billion shares changed hands on U.S. exchanges, slightly above the 20-day moving average of 10.72 billion shares. Advancing stocks outnumbered declining stocks on the New York Stock Exchange (NYSE) by a 2.16-to-1 ratio, with 258 new highs and 111 new lows. On the Nasdaq, 2,548 stocks advanced and 1,616 declined, for a 1.58-to-1 ratio in favor of gainers.

New Highs and Lows: S&P 500 and Nasdaq on the Move
The S&P 500 posted 27 new 52-week highs and 4 new lows, while the Nasdaq Composite posted 45 new highs and 177 new lows. The data suggests continued buying interest despite market volatility.

Hewlett Packard: Falling as Offering Goes On
Hewlett Packard Enterprise (HPE.N) shares fell sharply by 6.4% in after-hours trading after the company announced it would offer $1.35 billion in mandatory convertible preferred shares to finance its acquisition of Juniper Networks (JNPR.N). The news has raised investor concerns and put pressure on the stock.

HPE Strengthens AI Market Position with Juniper Networks Deal
Earlier this year, Hewlett Packard Enterprise (HPE) announced it would acquire networking company Juniper Networks for $14 billion in cash. The acquisition is intended to strengthen HPE's AI offerings and expand its market share in infrastructure solutions.

Funds for the Transaction: Convertible Share Financing
HPE said the net proceeds from the mandatory convertible preferred stock offering will be used to cover all expenses associated with the acquisition of Juniper Networks. The offering allows investors to purchase preferred shares, which typically pay higher dividends than common shares, and also gives holders the right to convert their shares into common shares at a future date.

Automatic Share Conversion: Terms and Conditions
The preferred shares offered by HPE will automatically convert into common shares on or about September 1, 2027, unless they are redeemed or exchanged by then. This provision provides investors with the flexibility to choose between a stable dividend income and the potential for common share appreciation.

Major Banks Support the Deal
Leading investment banks, including Citigroup, J.P. Morgan and Mizuho, will coordinate the issuance of preferred shares and act as joint bookrunners. This support validates the value of the deal and the credibility of HPE's strategy.

Growing Demand for AI Servers Raises Revenue Outlook
Last week, HPE raised its full-year revenue guidance, citing increased demand for AI-focused servers. The growth is driven by companies' significant investments in AI infrastructure, creating additional opportunities for HPE in the coming years.
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Oil storm and political intrigue: What's happening to US markets?

Markets react to presidential debate: stocks fall, dollar holds
US stock futures fell, the dollar held its ground and bond prices jumped after a tense US presidential debate in which Vice President Kamala Harris put Republican nominee Donald Trump on the defensive.

Fiery debate puts investors on edge
The presidential contenders focused on hot-button issues such as abortion, the economy, immigration and Trump's legal woes in the first debate. That has raised concerns among investors, especially ahead of upcoming U.S. inflation data that could shape Federal Reserve policy next week.

Bond yields fall on rate cut expectations
Bond yields, which move in the opposite direction to their prices, fell after Harris's strong speech, fueling expectations for interest rate cuts while investors also anticipate higher spending if Trump wins. Ten-year Treasury yields fell to 3.6068%, their lowest since June 2023. Meanwhile, 10-year German bond yields, the euro zone's benchmark, fell 2.5 basis points to 2.12%, a new one-month low.

Political battle intensifies after Biden exit
Harris's late entry into the presidential race following Joe Biden's resignation in July has intensified the political battle. Her confident debate only added to market jitters that have become more pronounced in anticipation of Trump's possible return to the White House.

Investors weigh the implications of a potential victory
S&P 500 futures fell 0.3% as the market speculates that a Harris presidency is unlikely to bring major spending or tax cuts.

Asian shares fall, Europe stays afloat
The MSCI index of Asia-Pacific shares excluding Japan fell 0.3%, reflecting broader trends in Asian markets.

European markets gain on US hurricane
European stock markets were more upbeat, with the pan-European STOXX 600 index up 0.4%. The gains were helped by gains in oil and gas stocks, driven by concerns that Hurricane Francine could impact US oil production.

Rates Tilt to Harris, But Fiscal Policy Remains Cloudy
The presidential debates provided little clarity on fiscal policy, but financial markets showed a bias in favor of Kamala Harris. Pop star Taylor Swift has thrown her weight behind her campaign, saying she will back Harris in the Nov. 5 election.

Dollar Weakens, Yen Strengthens
The U.S. dollar index, which tracks the dollar against six other major currencies, was down 0.256 percent at 101.38. Meanwhile, the Japanese yen rose more than 1 percent to 140.71 per dollar, its highest since late December. The gains came after Bank of Japan Governor Junko Nakagawa reiterated that the bank will continue to raise interest rates if the economy and inflation meet its forecasts.

US Crypto Assets Slip
US crypto and blockchain stocks fell in premarket trading after Bitcoin dropped 2%. This comes amid previous statements by Donald Trump, who positioned himself as a supporter of cryptocurrencies at the Bitcoin 2024 convention in Nashville in July.

Awaiting inflation data: investors focus on reports
Investors are closely watching the upcoming publication of the US Labor Department's Consumer Price Index (CPI), which is scheduled for Wednesday. The report is expected to provide further clues about the possible course of monetary policy, although the Federal Reserve has already emphasized that employment is taking precedence over inflation.

Inflation forecasts remain stable
According to the data from an analyst survey, the core consumer price index is expected to increase 0.2% in August from the previous month, in line with previous readings. This stability in the outlook leaves the question of the future of interest rates open, especially given that the latest employment report released on Friday did not provide a clear direction for the Fed's actions.

Fed rates in question: What to expect next week?
While most economists expect the Fed to cut interest rates next week, the size of the cut is still up for debate. After the mixed jobs report, it's clear the central bank needs more evidence of a slowdown or recession, particularly in the labor market.

"For the Fed to take more decisive action, we need more evidence of a slowdown in the economy, particularly in employment. I don't think the latest payrolls report provided that evidence," said ING's Carnell.

Market Price in Rate Cut Probability
Investors are currently pricing a 65% chance of the Fed cutting rates by 25 basis points, with a 35% chance of a more aggressive 50 basis point cut when the central bank makes its decision on September 18, according to the CME FedWatch tool.

Oil prices recover amid hurricane concerns
In commodity markets, oil prices began to recover from a significant drop in the previous session. Amid a decrease in US crude inventories and the threat of Hurricane Francine, which could disrupt production in the country, quotes rose by 2%. These factors partially offset concerns about a decrease in global demand.

Oil futures rise: Brent and WTI gain momentum
Brent crude rose by 2% to reach $70.64 per barrel, while US West Texas Intermediate (WTI) futures rose by 2.25% to reach $67.21 per barrel. These figures reflect a mixed reaction of markets to the current uncertainty around production and demand.

Cryptocurrency stocks under pressure: Growing chances of Harris alarm the market
Shares of US companies related to cryptocurrencies are falling in premarket trading on Wednesday. This comes after Democratic nominee Kamala Harris successfully attacked her opponent Donald Trump in a heated debate, putting him on the defensive.

Trump as a cryptocurrency supporter: the industry is waiting
Trump, who has previously positioned himself as a Bitcoin supporter, has promised to support the cryptocurrency sector. His possible return to the White House could mean favorable changes for the industry, which has been critical of the current administration for excessive regulatory measures. However, after the debate, the crypto market is showing warning signs: Bitcoin, the world's largest digital currency, fell 1.6% on Wednesday, while Ethereum lost 2%.

Analysts assess the impact of the debate on the crypto market
"Despite the fact that the debate was not directly about cryptocurrencies, market sentiment is changing in favor of Kamala Harris," comments Valentin Fournier, an analyst at BRN.

"This is a bit of a chilling outlook for Bitcoin, in contrast to the more optimistic forecasts Trump made at the Bitcoin 2024 conference," Fournier adds, pointing to a shift in sentiment that could impact the future of cryptocurrencies.

Harris's odds are rising: Markets are taking bets
Kamala Harris's odds of winning the election have increased from 53% to 56% after the presidential debate, while Donald Trump's chances of winning have fallen from 52% to 48%, according to online betting site PredictIt.

Trump and the Crypto Industry: Promises and Hopes
Back in July, Donald Trump was actively seeking support from the crypto industry, speaking at a conference with promises of more favorable regulations. During his speech, he urged: "Never sell your Bitcoin," hoping to attract votes and donations from the crypto community.

Markets Watch Bitcoin: A Preference Indicator
Ahead of the debate, many analysts and traders looked to Bitcoin as an indicator that could tell which candidate is leading the race. The cryptocurrency market, known for its high volatility, is often seen as a risky asset. It attracts the attention of the US Securities and Exchange Commission (SEC), which accuses market participants of violating securities laws.

Cryptocurrencies Are Growing in Popularity Despite Risks
Despite the risks and regulatory pressure, interest in cryptocurrencies continues to grow thanks to support from Wall Street and large corporations such as Elon Musk's Tesla, as well as the growing popularity of cryptocurrency exchange-traded funds.

Crypto Stocks Fall: React to Debate
Crypto stocks were under pressure ahead of the opening bell. Riot Platforms, Marathon Digital, and Hut 8 lost between 2.5% and 3.4%. Software developer and major Bitcoin buyer MicroStrategy fell 4%, while cryptocurrency exchange Coinbase Global fell 2.5% and blockchain farm operator Bitfarms fell 3%.

These crypto market swings highlight the uncertainty surrounding the outcome of the election and its possible impact on future regulation of the industry.

US Inflation Takes a Backseat as Political Battles Rumble
Amid the heated US presidential debate, upcoming inflation data has taken a backseat for now, but the lull could be temporary.

Last Stand Before Big Fed Decision
Wednesday's August consumer price report will be the last major economic data before the Federal Reserve's expected decision on September 18. With markets pricing in a roughly 35% chance of a sharp 50 basis point rate cut, and a 25 basis point cut already fully priced in, the upcoming data could significantly change traders' bets and positioning.

Economists See Inflation Stable
Economists surveyed expect both headline and core CPI to rise 0.2% month-on-month, with annual inflation falling to 2.6% in August from 2.9% in July. That outlook could impact the Fed's policy decisions.

Markets react to shifting balance of power
U.S. Treasury yields fell, while the dollar and Bitcoin, as well as U.S. stock futures, also fell. The market reaction is interpreted as a sign that the debate has given Harris a slight advantage ahead of the November 5 presidential election.

The yield on the 10-year U.S. Treasury note fell to 3.605%, the lowest since June 2023, while the dollar was at 141.68 yen.

Trump's budget forecasts and plans
Amid the election race, budget analysts expect Trump's policies to be aimed at creating new federal debt, which may become one of the key points of his agenda.

Treasury interest: markets await auction
The auction of 10-year Treasury notes scheduled for Wednesday will be an indicator of investor sentiment and their interest in U.S. government securities. The auction will help gauge how markets are assessing the current state of the economy and the outlook for interest rates.

Bank Stocks Under Pressure: Regulators Step Up Scrutiny
Bank stocks remain in focus after a sharp decline. On Tuesday, the Federal Reserve chairman unveiled a plan to increase capital requirements for the largest banks by 9%. The proposal was less stringent than the initial version, which met with considerable resistance from Wall Street, but still disappointed bank investors and some critics.

Mixed Signals from Wall Street: Earnings at Risk
Adding pressure on the banking sector were comments from JPMorgan Chase and Goldman Sachs. JPMorgan Chase cut its interest income forecasts, while Goldman Sachs CEO David Solomon said trading income could fall 10% in the current quarter.

UniCredit Targets Commerzbank: New Deal on the Horizon?
Meanwhile, in Europe, attention was drawn to Italian bank UniCredit, which announced Wednesday that it would acquire a 9% stake in Germany's Commerzbank. UniCredit is also seeking approval to potentially increase its stake in the bank, part of CEO Andrea Orcel's strategy to acquire a major German lender. The move is fueling speculation that UniCredit is preparing to make a move in the German market.
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Hot Forecast for EUR/USD on September 12, 2024

The slowdown in inflation in the United States turned out to be more significant than even the most optimistic forecasts, yet the situation in the currency market remained unchanged. Almost immediately after it was revealed that the consumer price growth rate had slowed from 2.9% to 2.5%, major media outlets began focusing on core inflation, particularly in its monthly measure rather than the annual one. Core inflation increased by 0.3%. Although the U.S. central bank never mentions this indicator and is thus largely insignificant, the media started claiming that the Federal Reserve will slowly lower interest rates because of core inflation. As a result, the media frenzy somewhat balanced out the actual data, leaving the market in its previous position.

Today, all eyes are on the European Central Bank's board meeting. The market has long been prepared for the refinancing rate to be lowered from 4.25% to 4.00%, so this fact will not affect investor sentiment. Everything will depend on the statements ECB President Christine Lagarde may make during the subsequent press conference, particularly regarding the central bank's future actions. The market is concerned only with the pace of monetary policy easing at least until the end of this year. If the head of the ECB announces even one more rate cut, it will substantially boost the U.S. dollar, allowing it to continue strengthening its position.

The EUR/USD pair reached the 1.1000 level during high volatility, but no significant changes occurred. The volume of short positions on the euro decreased again, leading to stagnation within the upper deviation of the psychological range of 1.1000/1.1050.

In the four-hour chart, the RSI technical indicator is moving in the lower 30/50 area, indicating bearish sentiment among market participants.

Regarding the Alligator indicator in the same time frame, the moving average lines point downwards, aligning with the price movement's direction.

Expectations and Prospects
For the next stage of decline, the price needs to stabilize below the 1.1000 mark. However, this will only shift the support level locally to the lower region of the psychological level. Until then, traders are likely to consider a scenario of stagnation or a price rebound from the psychological level. A significant increase in long positions on the euro is possible if the price stabilizes above the 1.1050 mark.

The complex indicator analysis points to a price rebound in the short term, while indicators focused on a downward cycle in the intraday period.
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EUR spreading its wings

By the end of this week, the euro has regained confidence and managed to recoup some of its earlier losses. While the euro has once again found bullish momentum and showed an uptrend, it has not managed to dethrone the US dollar.

Nevertheless, the euro has recouped earlier losses and is aiming for new heights. The euro's rise was aided by the ECB's decision to cut interest rates by a quarter of a percentage point in response to declining inflation in the eurozone and growing concerns about a possible economic slowdown in the reurozone. On Thursday, September 12, the ECB cut the key interest rate by 60 basis points, down to 3.65%. Analysts noted that this is the second rate cut in the past three months, following the first reduction by 25 basis points in June, the first since 2019. The deposit rate was also lowered by 25 basis points to 3.5%, and the marginal lending rate was slashed by 60 basis points to 3.9%.

Thursday's decision to reduce the ECB's base deposit rate came amid expectations that the Federal Reserve would begin lowering borrowing costs next week. Time will tell how accurate these expectations are. The ECB's rate cuts have been closely linked to inflation in the eurozone, which slowed to a three-year low of 2.2% in August. In July, this figure stood at 2.6%. A drop in industrial output in Germany and Italy has raised concerns about a potential slowdown in the eurozone economy after a brief period of growth recorded in early 2024.

Domestic inflation in eurozone countries remains high as wages continue to rise at an accelerated pace. However, pressure on labor costs is easing, and profits are partially offsetting the impact of higher wages on inflation, according to the ECB. The central bank's latest report included both hawkish and dovish remarks. On one hand, the ECB stated that financing conditions remain restrictive and economic activity is low. On the other hand, changes were noted, as policymakers revised their inflation forecasts upward. Many experts defined this approach as hawkish.

Current macroeconomic data on inflation in the EU aligns with expectations and confirms previous ECB forecasts. It is expected that average inflation in the eurozone will be 2.5% in 2024, 2.2% in 2025, and 1.9% in 2026. The ECB's Governing Council is committed to ensuring inflation returns to the target of 2% in a timely manner. To achieve this, the ECB plans to keep rates "sufficiently restrictive" for as long as needed.

Against this backdrop, the EUR/USD pair exhibited mixed dynamics, sometimes stalling and then slightly retreating. Following the ECB's rate decision, the pair's momentum shifted upward. As a result, the euro made notable gains, slightly pushing back the dollar. On Friday, September 13, the EUR/USD pair was trading around 1.1082, having regained a significant portion of its losses and aiming for new peaks. The single currency has since strived to maintain the stability it gained after the ECB's decision.

In its updated quarterly forecasts, the ECB expects the region's economy to grow by 0.8% in 2024, slightly below the June estimate of 0.9%, experts highlight. Furthermore, the ECB also revised its 2025 GDP growth forecast down to 1.3% from 1.4%. The reason, according to ECB representatives, is "weaker domestic demand in the coming quarters." The central bank also maintained its inflation forecast for this year at 2.5%, and for next year at 2.2%.

According to Christine Lagarde, the ECB president, there is a "mixed picture on inflation" in the eurozone, which continues to be driven by rising wages, despite easing pressure on labor costs. "Importantly, the ECB's track record for predicting inflation growth is limited. Therefore, the regulator wants to be certain about the accuracy of its decisions before proceeding with more aggressive rate cuts," analysts at ING assert.

Currently, the recovery of the European economy faces unfavorable factors. In this context, easing monetary policy restrictions should support the economy, Lagarde believes. According to the ECB president, the key upward risks for inflation are wages, profits, and trade tensions. September inflation data will likely be low, but inflation could rise again in the fourth quarter of 2024, the ECB forecasts.

In the current situation, currency strategists at Morgan Stanley expect quarterly deposit rate cuts of 25 basis points through the end of 2025. If this scenario plays out, the rate will drop to 2.25% by the end of next year, experts note. This scenario could weaken the euro and strengthen the dollar, Morgan Stanley adds. Continued pressure on the EUR/USD pair could threaten the euro's dynamics, potentially bringing it to parity with the dollar.
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Indexes surge as Adobe falls, Boeing slumps: How is this possible?

Stock indices in positive territory
The main U.S. stock market indices ended the trading session on Friday higher. Investors focused on the possibility of an interest rate cut by the Federal Reserve, which could be announced as early as next week. Small-cap stocks, whose profitability is especially sensitive to changes in monetary policy, looked particularly confident against the backdrop of these expectations.

Chances of a big cut are growing
Expectations regarding the size of the upcoming Fed rate cut have fluctuated throughout the week. By the end of Friday, the chances of a 50 basis point cut had increased significantly: if at the beginning of the week this scenario was estimated at 28%, then on Thursday it almost doubled to 49%, according to CME FedWatch data. At the same time, the probability of a more cautious step - a 25 basis point rate cut - remained at 51%.

Experts' opinion: 50 basis points is a real possibility
One of the respected experts, former head of the Federal Reserve Bank of New York Bill Dudley, spoke out in favor of a significant easing of the Fed's policy. He emphasized that the situation really is conducive to a rate cut of 50 basis points, noting this in his statement on Thursday evening.

At the same time, analysts such as Jim Baird of Plante Moran Financial Advisors note that the Fed is under pressure. At the meeting scheduled for September 18, a difficult decision will be considered - to go for more aggressive easing of monetary policy or to choose a more cautious path.

Small Caps Riding a Wave of Optimism
In stock markets on Friday, renewed hopes for a big rate cut gave confidence to large companies. But the biggest optimism was seen among smaller companies, reflected in the Russell 2000, which soared 2.5% in a day and is up 4.4% for the week.

Investors Bet on Improvement, Not a Crisis
Jim Baird, chief investment officer at Plante Moran Financial Advisors, said the rise in small-cap stocks reflects investors' belief that a 50 basis point rate cut does not signal an imminent economic downturn. "If the market had viewed the Fed's actions as a belated attempt to prevent a recession, we would not have seen the rally in risk assets like small caps," Baird said.

Risks Don't Frighten - Market Is Growing
Baird also added that the rise in riskier stocks is indicative of market sentiment: "We've seen significant gains in the riskiest areas of the stock market today."

According to Jason Pride, head of investment strategy at Glenmede, Friday's strong rally was largely due to comments from former New York Federal Reserve Chairman Bill Dudley. His comments about the possibility of a 50 basis point rate cut were a key driver for investors.

Consumer sentiment is also improving
However, according to a survey released Friday, US consumer sentiment improved in September. The decline in inflation has contributed to this optimism, although Americans remain cautious in their outlook for the future ahead of the November presidential election.

Dow, S&P and Nasdaq on the rise

The main US stock market indexes ended the trading session with gains on Friday. The Dow Jones Industrial Average added 297.01 points, or 0.72%, to end at 41,393.78. The S&P 500 rose 30.26 points, or 0.54%, to end at 5,626.02. The Nasdaq Composite also showed strong gains, rising 114.30 points, or 0.65%, to end at 17,683.98.

New Two-Week Highs
All three major indexes ended the day near their two-week highs, underscoring the overall optimism in the market. For the week, the S&P 500 rose 4.02%, while the Nasdaq rose an impressive 5.95%, marking their best weekly performance since early November. The Dow was also up 2.60% for the week.

Adobe, Boeing Slip on Corporate News
Despite the overall positive sentiment, not all companies posted gains. Adobe shares ended the day down 8.5%. Investors were disappointed by the Photoshop maker's forecast for lower fourth-quarter profit than analysts had expected.

Boeing shares were also under pressure, falling 3.7%. This happened amid a strike by workers at a plant on the West Coast of the United States, who refused to accept an offered contract, thereby halting production.

Chinese giant PDD Holdings under pressure due to US measures
Chinese e-commerce company PDD Holdings fell 2.4%. This fall was caused by the news that the Biden administration is introducing new restrictions on duty-free imports of low-value goods into the United States. These measures could affect products that are imported at a reduced value - below the $800 threshold set by the "de minimis" rule.

Markets Hold Back Growth Amid Corporate Risks
The index gains couldn't completely hide the problems of individual companies. However, ending the week with such a strong performance shows high levels of investor confidence in the near term.

Uber Shares Surge on Waymo Partnership
Uber shares soared 6.4% after the company announced a partnership with Waymo, Alphabet's self-driving division. As part of the partnership, Uber plans to launch a self-driving service in cities such as Austin, Texas, and Atlanta. This is a major step for Uber in developing autonomous technology, which has sparked enthusiasm among investors.

Stocks Rise Optimism
On the New York Stock Exchange (NYSE), the vast majority of companies showed gains. The number of stocks that showed positive dynamics outnumbered those that ended the day in the red by a ratio of 5.54 to 1. The stock exchange recorded 653 new highs and only 27 lows, indicating significant optimism among market participants.

The picture is similar on the Nasdaq: growth stocks outnumbered decliners by a ratio of 3.19 to 1, with 116 new yearly highs and 54 lows. The S&P 500 also recorded 60 new 52-week highs and only one new low.

Trading volumes remain high
US stock markets saw 10.15 billion stock trades during the session, slightly below the average for the past 20 trading days (10.78 billion). However, this indicates high activity among market participants in anticipation of the most important economic events of the week.

The Fed is on the verge of a decision: is a rate cut coming?
After 30 months of tight monetary policy aimed at containing inflation that has accelerated since the pandemic, the US Federal Reserve is preparing for a long-awaited easing. The market is expecting interest rate cuts this week, and the big question is how drastic the move will be.

China and the US: Market-moving news
Add to that the tensions on the international stage: Saturday's weak economic data from China, and Sunday's announcement of an FBI investigation into a second assassination attempt on Republican presidential candidate Donald Trump, set the stage for a week of news that will be key to future US economic policy.

Investors are eagerly awaiting the outcome of the Fed meeting, as its decision could have a significant impact on stock market action and sentiment.

Expectations rise: Rate could fall by 50 basis points
Investors are focused on growing speculation that the Federal Reserve will announce a 50 basis point rate cut at its meeting on Wednesday, rather than a more cautious 25 basis points. The increased attention to this scenario is due to media reports last week that hinted at a possible policy reversal. Despite the fact that Fed officials are keeping a "quiet mode" ahead of the important meeting, this has not stopped the market from actively discussing and predicting.

Global markets remain calm, but the US is preparing for growth
Global markets were quiet on Monday, partly because trading floors in Japan and mainland China were closed for holidays. However, in the US, the dynamics of the end of last week, when Wall Street indices came close to their record levels, continued to have an impact. Stock futures showed strong gains, with small companies reflected in Russell 2000 index futures particularly strong.

Fed at a crossroads: investors await easing
Fed rate futures are currently pricing in a 40 basis point easing. Moreover, the chances of a 50 basis point rate cut are estimated at more than 60%. Equally important, markets are already pricing in further rate cuts, up to 120 basis points by the end of the year, which could be an important signal about the regulator's upcoming decisions.

Treasury bonds and the dollar under pressure
Short-term Treasury yields have shown a noticeable decline, falling below 3.55% for the first time in two years. This has led to a significant compression of the yield curve between the two-year and ten-year bonds, with the gap reaching its most positive value since June 2022, at almost 9 basis points. Such dynamics have also put pressure on the dollar, which began the week weaker, as it bore the brunt of the decline in yields.

The market is frozen in anticipation of the key event of the week — the Federal Reserve's decision. If the Fed decides to ease policy more aggressively, this could set a new direction for further market movement.

The dollar is losing ground amid expectations of rate cuts
The US dollar continues to decline amid speculation around the upcoming Fed decision. The dollar index (DXY) fell sharply, again approaching its lowest levels in a year. Investors are still focused on the likelihood of significant monetary easing, which is putting pressure on the American currency.

Emerging market currencies are growing and the yen is strengthening
The MSCI Emerging Market Currency Index added 0.25%, reaching a record high. Amid the weakening dollar, other currencies are gaining support. Thus, the Japanese yen strengthened to 140 per dollar for the first time since July 2022, amid expectations of a possible rate hike by the Bank of Japan. This move highlights the growing differences in the monetary policies of the world's leading economies.

Sterling rises on BoE decision expectations
Sterling also rose, with investors speculating that the Bank of England may hesitate to make a second rate cut this year when it meets on Thursday. Uncertainty is heightened by expectations for the first budget of the new UK Labour government, due to be announced next month.

Weak industrial production and retail sales
Economic data from China over the weekend adds to the pessimism about the country's economy. Industrial production growth slowed to a five-month low in August, while retail sales and new house prices also fell short of expectations, strengthening the case for more aggressive government stimulus measures that experts say are still insufficient.

5% growth target under threat
Weak data not only dampens investor expectations, but also makes China's 5% growth target more difficult to achieve. Bank lending figures released on Friday also came in below forecasts, further highlighting the weakness of domestic demand and the need for more economic support from the authorities.

Amid a weakening dollar, global markets are showing mixed dynamics. On the one hand, the US currency is losing ground, giving other players an opportunity to strengthen, while on the other hand, economic worries from China are adding uncertainty to the global picture. Investors continue to closely monitor developments, awaiting decisions by the central banks of the world's leading economies.

Hang Seng shows growth despite global trends
On Monday, Hong Kong's Hang Seng index showed growth despite the general weakening of global markets. At the same time, the offshore yuan strengthened against the weaker US dollar, which supported the positive dynamics on Asian markets. Amid global uncertainty, China and Hong Kong continue to show signs of resilience, which inspires optimism in investors awaiting further actions by the authorities to support the economy.

Secret Service Thwarts Trump Assassination Attempt
Political tensions in the United States are heating up as the presidential election approaches. Over the weekend, the Secret Service foiled an assassination attempt on Donald Trump while he was playing golf in West Palm Beach, Florida. The FBI called it an apparent assassination attempt on the former president.

Kamala Harris Is the Favorite Amid TV Debates
After the recent TV debates, Trump has fallen significantly behind Democratic candidate Kamala Harris in the betting markets. Harris, albeit by a slim margin, remains the favorite to win the upcoming November election, which could have a significant impact on the country's future economic and political prospects.

European Stock Exchanges Quiet
European stock markets were relatively stable on Monday. Indexes were little changed, reflecting the general mood of investors awaiting important economic and political decisions.

Rexel Shares Soar After Deal Rejected
Despite the calm in the markets, the news of the deal has attracted the attention of investors. Shares of the French company Rexel, listed on the Paris Stock Exchange, jumped 12.6% after it was announced on Sunday that it had rejected a $9.4 billion takeover offer from QXO, headed by famous billionaire Brad Jacobs. The deal demonstrated a high valuation of the French business, which has attracted keen interest from traders.

Global markets continue to be in a state of anticipation, reacting to political and economic events. From assassination attempts on Trump to important corporate deals, events are moving quickly. Meanwhile, Asian markets are showing optimism amid a weaker dollar, and Europe remains stable.
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Intel heads higher as federal grants give stocks a boost

Investors weigh Fed moves, market reacts unevenly
US stocks were mixed on Monday, with the S&P 500 posting small gains while the Nasdaq slipped significantly as Big Tech stocks slid. Investors turned their attention to the upcoming US Federal Reserve meeting, where they are expected to decide on an interest rate hike.

Tech is on the retreat
The tech sector, which has been the leader in the S&P 500 all year, suffered the biggest losses. The S&P tech index lost 0.95%, the biggest decline among all 11 major sectors on the day.

A major contributor to the decline was Apple, whose shares fell 2.78%. This led to significant weakness in both the S&P 500 and the Nasdaq Composite. The reason for this decline was the forecasts of analysts at TF International Securities, who reported weaker-than-expected demand for the new iPhone 16 lineup.

Chipmakers under pressure
Apple was not the only one feeling the negative market sentiment. Chipmakers also suffered. Nvidia, whose shares showed the best result in the S&P 500 for the year, lost 1.95%. Broadcom fell 2.19%, while Micron Technology fell 4.43%. This led to a 1.41% decline in the Philadelphia SE Semiconductor Index.

Investor Strategies: Quick Sells in Giant Stocks
Ken Polcari, chief market strategist at SlateStone Wealth, noted that tech giants are often the first choice for sale when investors need to raise capital quickly. "If people want to raise money quickly, they sell big companies like Apple, Nvidia, Amazon, or Microsoft. You can do it quickly and with minimal risk to your portfolio," Polcari explained.

Financials Frozen in Anticipation of Fed Decisions
Investors continue to watch the Federal Reserve's actions, expecting further monetary tightening to impact markets in the coming days.

Unstable Expectations Ahead of Fed Meeting
Markets are showing mixed results ahead of the US Federal Reserve's (Fed) decision. Investors are playing it safe, looking to protect their assets and prepare for possible changes in monetary policy.

"They want to have reserves to act in case of uncertainty related to the Fed's decision," experts comment.

Dow Jones rises and Nasdaq weakness
On Monday, the Dow Jones Industrial Average rose by 228.30 points, which is equivalent to an increase of 0.55%, and reached 41,622.08. At this time, the S&P 500 also slightly increased by 0.13%, rising by 7.07 points to 5,633.09. In contrast, the Nasdaq Composite suffered losses, falling by 91.85 points, or 0.52%, to 17,592.13.

Tech Sector Turns Down
Of the 11 key S&P 500 sectors, only tech and consumer discretionary posted negative dynamics. Tech stocks continued to slide under pressure, partly due to volatility amid expectations of the Fed decision. At the same time, financial companies rose by 1.22%, and the energy sector rose by 1.2%, leading the day's performance.

Betting on Fed Easing
Markets have shown positive dynamics since the beginning of the year, thanks to expectations that the Fed will ease its monetary policy. At the same time, economic indicators suggest that the US economy may be able to avoid a recession, adding to optimism among market participants.

The Dow Jones ended the day at a record high, while the S&P 500 index remains within 1% of its all-time high reached in July of this year.

Fed Rate Cut Forecasts
The market remains on hold for the outcome of Wednesday's Fed meeting. Expectations for a possible rate cut continue to fluctuate. The chance of a 50 basis point rate cut is now 59%, according to CME's FedWatch tool.

Intel Gets Government Support
Intel Corp shares soared 6.36% after a report said the company would receive $3.5 billion in federal support. The funds will be used to produce semiconductors for the U.S. Department of Defense. The news not only strengthened Intel's position in the market, but also became an important step in ensuring the country's national security through the development of the semiconductor industry.

Boeing Suspends Hiring Amid Strike
Meanwhile, Boeing shares fell 0.78%, which is due to the ongoing strike by the company's workers. The aircraft manufacturer said it will suspend hiring and consider temporary furloughs for current workers if the strike continues in the coming days. This creates additional difficulties for the company, which is already under pressure due to the difficult economic situation.

Investor confidence is growing
On the New York Stock Exchange, there is a significant advantage of stocks that showed growth over those that declined, with a ratio of 2.74 to 1. On the Nasdaq, the situation was also in favor of the "bulls", where advancing stocks outnumbered decliners by 1.17 times. These data highlight the overall optimism in the market, despite the negative impact of certain sectors.

New records amid expectations
The S&P 500 index recorded 88 new highs over the past 52 weeks and only one low, which indicates good investor sentiment. The Nasdaq Composite, in turn, showed 143 new highs and 83 new lows. These figures confirm that the markets continue to rise, despite the upcoming Fed decisions.

Trading activity is falling
Trading volume on U.S. stock markets amounted to 9.74 billion shares, which is slightly below the average of 10.75 billion shares over the past 20 trading days. The decline in activity can be explained by the expectation of the Federal Reserve meeting, the results of which may have a significant impact on the further movement of the market.

US indices under pressure from technology stocks
The technology sector continues to drag indices down, despite the overall growth in the market. At the same time, the US dollar reached its lowest level in more than a year in a pair with the Japanese yen, which is associated with increased expectations of easing monetary policy by the Fed at the upcoming meeting.

Expectations of interest rate cuts are growing
Investors and analysts are eagerly awaiting Wednesday, when the Federal Reserve will decide on interest rates. Expectations have increased: the Fed may cut rates by half a point, which is more than previously expected. This step is aimed at supporting the economy and preventing a sharp slowdown, while it is important to keep inflation under control and stabilize the labor market.

Markets watch Fed rhetoric
Kathleen Brooks, director of research at XTB, said market participants are focused less on the size of the rate cut and more on the rationale behind the Fed's actions.

"If a 50 basis point cut is accompanied by a statement of intent to provide a soft landing, that will be viewed positively by the market. However, if confidence weakens and signs of panic emerge, a sell-off may be inevitable," she said.

Dollar weakens amid market expectations
The dollar index, which tracks the dollar against six major currencies, was down 0.33% at 100.69. The dollar-yen pair was also under pressure, with the greenback down 0.13% at 140.63 yen. These fluctuations are related to expectations of a more accommodative Fed policy, which could lead to a further decline in yields on dollar assets.

Trump Media shares have lost their gains
News of a second assassination attempt on Donald Trump, the Republican presidential candidate, also attracted the attention of investors. On Sunday, shares of his company Trump Media & Technology initially rose in price, but by the end of the trading session on Monday they had fallen by more than 3%.

Restrictions on selling Trump Media shares will be lifted
The moratorium on selling Trump Media shares will be lifted over the next 10 days, which could add volatility to the market. However, Trump himself said on Friday that he does not plan to sell his shares, which could calm investors a little.

Hopes for easing monetary policy lift shares
In anticipation of a significant cut in the interest rate by the US Federal Reserve, shares continue to receive support, which is reflected in the growth of global indices. The MSCI All-World Index rose 0.20% to 828.55, confirming that optimism surrounding the Fed's actions has supported investor sentiment for months.

Bonds React to Market Expectations
Short-term U.S. Treasury yields hit their lowest in two years. Two-year yields, which are particularly sensitive to interest rate changes, fell 1.7 basis points on Monday, continuing a downward trend seen throughout September.

Longer-term bonds also fell. Ten-year yields fell for a second straight day, falling 3.1 basis points to 3.618% from 3.649% on Friday.

Rates and Probabilities: Traders Brace for Fed Decision
Traders are increasingly optimistic that the Fed will decide on a half-point rate cut at its meeting on Wednesday. Futures data showed the likelihood of that scenario rose to 59%, up from 30% a week earlier. Those expectations have changed sharply after media reports suggested more aggressive easing could be in the works.

Japan, UK central banks in focus
Other key central bank meetings are also in focus this week. The Bank of England and the Bank of Japan are set to discuss their next steps. The Bank of England is expected to leave interest rates on hold at 5.00% when it meets on Thursday. However, markets are still pricing in a further rate cut of 31%.

The Bank of Japan will announce its decisions on Friday. It is widely expected to keep rates on hold for now, but may hint at a possible tightening in October.

US data could have an impact
In addition to central bank moves, investors will be closely watching economic data from the US this week, including reports on retail sales and industrial production. These data could have a significant impact on the market, either strengthening or weakening expectations for the Fed's next steps.

Yen Strengthens as Bond Yields Fall
A decline in US Treasury yields supported the Japanese yen's strength against the dollar. The trend reflects investor caution as investors wait for the Fed to cut interest rates further. The euro also holds its own, remaining at $1.1200, thanks to expectations of a rate cut by the European Central Bank, which gives stability to the European currency.

Gold approaches record levels
Low borrowing rates have stimulated the growth of gold prices, which rose by 0.22%, reaching $2,582.39 per ounce. This level is approaching the historical maximum of $2,588.81, set earlier. The precious metal continues to attract investors as a safe asset amid uncertainty in global markets.

Oil prices on the rise after hurricane
Oil prices rose sharply amid the aftermath of Hurricane Francine, which led to a temporary halt of about 20% of oil production in the Gulf of Mexico. Restoring production will take some time, which caused an increase in the cost of oil on world markets.

Brent crude futures added $1.14, reaching $72.75 per barrel. US crude also rose, rising $1.44 to $70.09 a barrel. These changes could impact further energy price dynamics in the coming days.

Overall, the decline in bond yields, the strengthening yen and the rise in oil prices are indicative of current global economic trends, which are shaped by natural disasters and expectations of rate cuts from key central banks.
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IT giants on the rise: how Microsoft and Intel changed the picture against the backdrop of a stable S&P 500

Stock market froze in anticipation: investors prepare for the Fed's steps
US stock indices ended trading on Tuesday almost at the same level, giving up the previously reached heights that had earlier allowed the S&P 500 and the Dow Jones Industrial Average to update their historical maximums. The reason for such caution was the expectation of the first interest rate cut by the Federal Reserve in 4.5 years.

S&P 500 rise and fresh economic data
During the trading session, the S&P 500 index briefly rose to 5670.81, which was facilitated by fresh data on the US economy. The data allayed fears of a sharp slowdown in the country's economy.

The Commerce Department reported that retail sales unexpectedly increased in August, despite a decline in auto dealership revenue. That decline was more than offset by a surge in online sales, which helped the economy remain stable for much of the third quarter.

The economy is growing, but not very fast
Russell Price, chief economist at Ameriprise Financial Services in Troy, Michigan, said expectations for the economy were fairly optimistic even before the latest data were released. He said the economy is growing, but growth remains relatively slow.

"Today's economic data confirms that we are in an expansionary environment, although it is not as fast as we would like," Price said.

Fears about inflation and the Fed's actions
Price added that the upcoming rate cut could have a dual effect. It will either increase inflation fears or raise new questions about whether the Fed's measures are fast and decisive enough to prevent a recession.

"Today's trading session shows a move away from historical highs, as tomorrow may bring disappointment for some investors," the expert concluded.

This day showed that the markets are in a state of anticipation: all attention is focused on the Federal Reserve's further actions and their possible impact on the US economy.

Mild changes, big expectations: Dow Jones slightly down, S&P and Nasdaq up
Trading on US stock exchanges on Tuesday ended with minimal changes: the Dow Jones Industrial Average index fell by 15.90 points (0.04%) to 41,606.18, and the S&P 500 rose by 1.49 points (0.03%) and reached 5,634.58. Meanwhile, the Nasdaq Composite added 35.93 points, or 0.20%, to close at 17,628.06.

Investors are keeping a close eye on the Fed's decision
According to CME's FedWatch tool, the odds of the Federal Reserve cutting interest rates by 50 basis points after its two-day meeting on Wednesday are now priced at 65% by the market. Just a week ago, the odds were just 34%, reflecting investor expectations fluctuating amid economic uncertainty.

Microsoft Strengthens Its Position
One of the key drivers of the S&P 500's gains was Microsoft's 0.88% gain in shares. The tech giant emerged victorious after its board approved a $60 billion share buyback program and raised its quarterly dividend by 10%. Such moves have bolstered investor confidence in the stability and future success of the AI leader.

Blue Chips and Russell 2000 in Focus
The Dow Jones, despite a slight decline, continued to surprise, with the index hitting intraday record highs for two days in a row. Meanwhile, the Russell 2000 index, which tracks small-cap companies, was the best performer among the major indices, gaining 0.74% for the session. The gain can be attributed to investors' expectations that the Federal Reserve's rate cut will favor smaller companies.

Energy Leads, Healthcare Stumbles
The energy sector of the S&P 500 was the best performer among the 11 major sectors, gaining 1.41%. This happened against the backdrop of rising oil prices, which spurred oil stocks. At the same time, health care was the day's loser, falling 1.01%, becoming the weakest sector in the index. Investors continue to watch equity markets cautiously as they weigh the chances of further Federal Reserve action and its possible impact on economic growth prospects.

Intel Strengthens Its Positions, Amazon Supports Growth
One of the key events on the stock market on Tuesday was the rise of Intel shares by 2.68%. This growth was due to the conclusion of an agreement with Amazon Web Services, a division of Amazon's cloud services, which became an Intel client for the production of individual chips used in the development of artificial intelligence. Amazon shares also showed positive dynamics, adding 1.08%.

The market is generally positive
Data on the results of trading on the New York Stock Exchange and Nasdaq showed that the number of shares that rose in price exceeded the number of shares that fell in price. On the NYSE, this ratio was 1.55 to 1, and on Nasdaq - 1.25 to 1. This indicates the prevalence of positive sentiment among investors.

New Highs on the Back of Stable Trading Volume
The S&P 500 index showed 48 new 52-week highs, while not a single new low was recorded. The Nasdaq Composite saw more significant changes, with 147 new highs and 68 new lows. Total volume on U.S. exchanges was 10.23 billion shares, slightly below the 20-day average of 10.74 billion.

Labor Market Impact and Fed Rate Outlook
The labor market slowdown seen over the summer, as well as recent media reports, have raised expectations that the Federal Reserve will take more decisive action at its meeting on Wednesday. In particular, a 0.5% rate cut is looking increasingly likely as the Fed seeks to avoid weakening the economy.

Economic Data Suggests Caution
Meanwhile, the latest U.S. economic data showed that retail sales increased in August and factory activity began to recover again. These stronger numbers may ease the pressure for an aggressive rate cut, but the market is still looking for decisive action from the Fed.

Stock markets remain tense as investors weigh the impact of positive economic data on the Fed's likely actions to maintain economic stability.

Economy on the rise: Fed on the cusp of a major decision
"The current data points to a healthy economy," said Peter Cardillo, chief economist at Spartan Capital Securities. He expects Fed Chairman Jerome Powell to decide on a 25 basis point cut at his meeting on Wednesday. However, the Fed's next steps will depend on how the economy evolves, which Powell is likely to hint at in his speech.

Cautious steps or more aggressive policy?
Cardillo noted that the Fed may consider a more aggressive approach at future meetings, but will proceed with caution for now. "They will start with small steps, but they may take more decisive measures as they go along," the expert added.

Traders place bets on the Fed's decision
As they await the Fed's decision, markets continue to make predictions. According to CME Group's FedWatch tool, traders are pricing in a 63% chance that the Fed will cut rates by 50 basis points and a 37% chance that it will cut by 25 basis points.

Global indices and the dollar are stable
The MSCI All-World Index, which tracks global markets, showed a modest gain of 0.04%, reaching 828.72, reflecting stable sentiment in global stock markets ahead of the Fed's key decisions.

Meanwhile, the dollar strengthened against its major counterparts, rising 0.28% to 100.98 in a basket of currencies. The dollar also showed solid gains against the Japanese yen, rising 1.19% to 142.29.

Focus on the Bank of England and the Bank of Japan
It's not just the Fed that has investors' attention this week. The Bank of England and the Bank of Japan are also scheduled to meet to discuss their monetary policy. However, unlike the Fed, these regulators are expected to keep interest rates at current levels.

Disappointment is inevitable?
Russell Price, chief economist at Ameriprise Financial Services, commented on the current market sentiment. "Today's trading shows that we are on the brink of a major decision. Tomorrow, some investors are likely to face disappointment," Price said.

All eyes are on tomorrow's Fed meeting, which could set the tone for future economic developments both in the U.S. and globally.

U.S. Treasury yields rise
The yield on two-year U.S. Treasuries, a gauge of short-term interest rate expectations, rose 4.4 basis points to 3.5986%, after falling to a two-year low of 3.528% in the previous session. The 10-year yield also rose, rising 2.3 basis points to 3.644%, up from 3.621% late Monday.

China's economy remains a concern
Asian markets were weighed down by China's fragile economic recovery. The latest data released over the weekend showed industrial output growth slowed to a five-month low in August, while retail sales and new home prices continued to decline, adding uncertainty to the recovery picture in the region's largest economy.

Oil prices rise amid hurricane
Oil prices rose as the industry continues to analyze the impact of Hurricane Francine, which has affected oil production in the US Gulf of Mexico. US crude oil rose 1.57% to $71.19 per barrel. Brent crude ended the day at $73.7 per barrel, up 1.31%. The gains were due to uncertainty surrounding the recovery of oil production in the region following the natural disaster.

Gold slips after record gains
Despite spot gold hitting a record high on Monday, prices corrected lower on Tuesday. Gold fell 0.51% to $2,569.51 per ounce. The decline followed a strong rally earlier in the week, but gold remains an important indicator of market sentiment, reflecting demand for safe havens amid global uncertainty. Economic dynamics around the world, including the US and China, continue to impact markets, causing swings in bond yields, oil and gold prices.
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Surprise Reversal: Fed Cuts Rates, Markets Fall, Indexes Lose Ground

Volatile Trading Ends Down
US stock indexes closed with minor losses on Wednesday after the Federal Reserve unexpectedly cut interest rates by 50 basis points, the upper limit of expectations for the first rate change in four years. Investors were expecting the Fed's move, but their reactions to the decision were mixed.

Short-Term Market Fluctuations
The trading session was jittery. The S&P 500 had been moving up and down, showing little change, before the Fed's decision. After the rate cut was announced, the index rose 1%, but then weakened again and closed with losses. The Dow Jones index saw similar swings, reaching an intraday high, but then, like the S&P 500, ending the day lower.

The Fed is betting on inflation and the labor market
The Federal Reserve justified its decision by citing "high confidence" that inflation is moving toward its 2% target. The Fed's policy focus now is on maintaining the resilience of the labor market, which remains the focus of economists. The half-percentage-point rate cut was a key step in that direction.

"The Fed has signaled that they are serious about cutting rates by 50 basis points and will likely continue to do so through the end of the year," said Brian Jacobsen, chief economist at Annex Wealth Management in Wisconsin. In his opinion, such a move indicates the Fed's intention to stabilize the unemployment rate at 4.4% and return inflation to target levels.

Market expectations: from 25 to 50 basis points
Over the past few days, markets have been unable to decide on the forecasts for the size of the rate cut. According to the FedWatch tool from CME, the probability of a 25 basis point cut was estimated at 65% last week. However, by the time the Fed's decision was announced on Wednesday, the probability of a larger 50 basis point cut had already reached 57%.

Minor losses amid expectations of rate cuts
US stock indices ended trading in the red. The Dow Jones Industrial Average fell by 103.08 points, which amounted to 0.25%, ending the day at 41,503.10. The S&P 500 lost 16.32 points, or 0.29%, to close at 5,618.26. The Nasdaq Composite also lost ground, losing 54.76 points, or 0.31%, to 17,573.30.

Markets Betting on More Rate Cuts
Investors in the market are already bracing for the Federal Reserve to cut rates by at least 25 basis points at its November meeting. In fact, analysts are predicting a 35% chance that the Fed could cut rates by as much as 50 basis points.

Markets Hunger for More
"What amazes me is that even when markets get what they think they want, their appetites continue to grow," said Steve Sosnick, chief market strategist at Interactive Brokers in Connecticut. He points out that despite expectations, stocks are not showing significant growth after the news, which may be due to the fact that the good news is already partially priced in after the previous seven-day rally.

Historically high borrowing costs
Recall that the cost of borrowing in the US has reached record levels in the last two decades, starting in July 2023, when the Federal Reserve raised interest rates by 25 basis points to a range of 5.25% to 5.50% to combat inflation. This was the latest increase in a series of Fed decisions aimed at slowing inflationary pressures.

Fed Chairman's statement: No urgency to act
After the latest rate cut, Fed Chairman Jerome Powell noted that there is no immediate need for urgent action. This statement indicates a more cautious approach to further changes in monetary policy, which signals a stabilization of the pace of rate cuts.

Small Caps Take the Lead
Small-cap stocks, traditional winners in a low-interest-rate environment, showed solid gains. The Russell 2000 index, which tracks such stocks, rose 2.44% on the day, though it ended the day with a modest gain of 0.04%. That performance allowed it to outperform the larger-cap indices.

Regional banks gain strength
Regional banks, which have been under pressure from high interest rates in recent times, have also shown a recovery. The KBW index, which tracks their activity, jumped 3.53% during trading and ended the session with a gain of 0.46%. This growth shows that banks are adapting to changing market conditions.

Records as the economy stabilizes
Stock markets have shown significant gains in 2023, with all three key indices reaching record highs. Lower inflation and signs of a cooling labor market have inspired confidence that the period of high interest rates may gradually end, supporting optimism among investors.

Intuitive Machines shares soar 38% after NASA contract
One of the market's top gainers was Intuitive Machines, which rose an impressive 38.3%. The jump came after the announcement of a $4.8 billion contract with NASA to provide navigation services for space missions, boosting investor interest.

Market Balance: Stocks Advancing Outperform
On the New York Stock Exchange (NYSE), advancers outpaced decliners by a 1.14-to-1 ratio, while on the Nasdaq the ratio was 1.36-to-1, showing that positive sentiment remains despite volatility.

Record Performances for the S&P 500 and Nasdaq
The S&P 500 has posted 43 new highs over the past 52 weeks and no new lows. The Nasdaq Composite has been even more impressive, with 165 new highs and 69 new lows, underscoring investor confidence in the upside.

Trading volume exceeded average
Trading activity on US exchanges was also above average. The volume of transactions amounted to 11.63 billion shares, which is higher than the average of 10.82 billion shares over the past 20 trading days.

Unexpected rate cut
The US central bank went for a more significant cut in the overnight rate than expected, reducing it by 0.5%, as opposed to the traditional 0.25%. This decision is based on the regulator's confidence that inflation will continue to move towards the target level of 2%. The new rate, which determines how much banks pay each other for short-term loans, is now in the range of 4.75%-5.00%, which is in line with market expectations.

Stock market reaction: short-term growth
After the Federal Reserve's announcement, the S&P 500 index initially rose by 1%, but then lost momentum and ended the day 0.29% lower, stopping at 5618.26. The move shows that despite investors' positive expectations, the market is not ready for a sharp rally.

Seven-day rally — the effect has been priced in
"While markets got what they wanted, stocks have yet to see a significant rally. After seven straight days of gains, a lot of the positive news has already been priced in," said Steve Sosnick, chief market strategist at Interactive Brokers. His comment underscores the sentiment among market participants who may have expected more from the rate cuts.

Record rates amid slowing inflation
The overnight rate was at its highest since July 2023, when the Fed continued to fight inflation with rate hikes. That made borrowing costs the highest in two decades, putting pressure on both consumers and businesses.

Global markets also felt pressure
The MSCI World Equity Index hit a new high during the session but was unable to hold on, falling 0.29% to 826.29, reflecting the global reaction to the Fed's move and uncertainty about where markets are headed.

The dollar rose slightly after weakening
The dollar index, which tracks the value of the US currency against major global currencies such as the yen and euro, initially weakened on the news of the rate cut. However, it later strengthened slightly, rising 0.07% to 100.98, reflecting volatility in currency markets and investors' eagerness to adapt to the new monetary policy.

Investors await further developments
While the Federal Reserve's actions were in line with expectations for many market participants, the reaction to the rate cut was muted, indicating that investors are still weighing the longer-term implications and potential future moves by the regulator.
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