Wall Street ends in the red after Fed cuts interest rates – Stock Market

Wall Street ended Wednesday’s session in negative territory, despite the Federal Reserve (Fed) announcing its first expected interest rate cut in four years.

Sentiment cooled after the S&P 500 hit record highs after the US Fed moved forward with a 50 basis point rate cut (the so-called jumbo cut), as some forecasts had suggested. Major indexes fluctuated on Fed Chairman Jerome Powell’s statement that the bank will be patient and that a 50 basis point reduction will not be the next pace of reductions.

The S&P 500 fell 0.29% to 5,618.26 points. The Nasdaq Composite fell 0.31% to 17,573.30 points, while the Dow Jones lost 0.25% to 41,503.10 points.

Projections released after the Fed’s two-day meeting showed a slim majority, 10 of 19 Fed officials, favored cutting rates by at least another half-point at the two remaining meetings in 2024 (in November and December). Policymakers also forecast an additional one percentage point of cuts in 2025.

In economic projections, those responsible for monetary policy in the US have slightly revised downwards their GDP growth forecast for this year, to 2% from 2.1%, maintaining the same pace in the following years.

However, they are more optimistic about inflation, having revised their projections downwards and anticipating that the personal consumption expenditures (PCE) price index will be 2.3% in 2024, compared to the 2.6% forecast in June. “Inflation is now very close to our target (of 2%). We have gained greater confidence that inflation is declining sustainably towards 2%,” Powell said.

Morgan Stanley’s Chris Larken told Bloomberg: “Markets got what they wanted – a first big cut from the Fed. Now we’ll see if they’re satisfied. The Fed has a well-earned reputation for taking its time, so there’s a chance of some disappointment if it’s seen as moving too slowly, especially if economic data continues to slow. But today they delivered.”

Among the main market movements, T-Mobile stood out, losing almost 3% after analysts considered the company’s growth ambitions for the next three years – presented this Wednesday – below expectations.

Among the “big tech” companies, Apple advanced 1.80%, Alphabet grew 0.33% and Meta gained 0.30%. On the other hand, Nvidia lost 1.92%, Microsoft lost 1% and Amazon lost 0.24%.