Market Commentary - Foreign Markets
US stocks erase intraday gains to end in negative As on : 19-Sep-24  11:45

US stocks saw considerable volatility during the trading session on Wednesday following the Federal Reserve's announcement of its decision to lower interest rates by a super sized 50 bps. The economic projections provided by Fed officials at the meeting suggested the central bank will cut rates by another 50 basis points by the end of the year. Fed officials also expect to continue lowering rates next year, with the projections indicating rates will be lower by another full percentage point by the end of 2025.

The major averages showed wild swings back and forth across the unchanged line before eventually closing in negative territory. The Dow and the S&P 500 reached new record intraday highs immediately following the Fed announcement but finished the day in the red. The Dow fell 103.08 points or 0.3 percent to 41,503.10, the S&P 500 slipped 16.32 points or 0.3 percent to 5,618.26 and the Nasdaq dipped 54.76 points or 0.3 percent to 17,573.30.

Nvidia, Microsoft, Oracle, and AMD fell over 1%. On the other hand, Apple added 1.8% while Meta traded slightly above the flatline. Equities and bonds rallied after Fed's bazooka move, but quickly erased their gains after Fed Chair Powell said that he does not expect the era of ultra-low interest rates to return and that the neutral rate will likely be significantly higher than the previous regime. US treasury yields are quoting above 3.7% and the DXY also recovered yesterday's lost momentum and is currently quoting at 100.62, up 0.33% on the day.

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