"Investors initially reacted positively, lifting the Dow Jones Industrial Average and the small-cap Russell 2000 Index, which tends to benefit most from lower borrowing costs. However, by the end of the week, the S&P 500 gave back earlier gains, and the Nasdaq Composite declined as concerns resurfaced around stretched technology valuations and the sustainability of heavy investment in artificial intelligence."
"At its final meeting of the year, the Federal Reserve lowered its benchmark rate by 25 basis points to a target range of 3.50% - 3.75%. The decision was notable for the first policy dissent in six years, underscoring mixed views within the central bank on how quickly economic conditions may soften. Fed Chair Jerome Powell signalled a more cautious stance, acknowledging emerging "downside risks" to the labour market and emphasizing the need to assess incoming data before making further policy changes."
"Labor market indicators also pointed to shifting momentum. Weekly jobless claims climbed to their highest level since September, suggesting some cooling in employment conditions. However, job openings for October edged slightly higher, and continuing unemployment claims fell, highlighting a still-resilient but gradually moderating labour landscape. Treasury markets reflected this uncertainty: short-term yields declined after the Fed's announcement, while longer-term yields moved higher, signalling investor expectations of ongoing economic adjustments ahead."
U.S. markets experienced a mixed week with several major indexes briefly reaching record highs after the Federal Reserve cut interest rates for the third consecutive meeting. The Fed lowered its benchmark by 25 basis points to a 3.50%–3.75% target range, with a rare dissent reflecting mixed internal views. Chair Jerome Powell signalled caution and noted downside risks to the labour market, urging data dependence. Early gains for the Dow and Russell 2000 faded as the S&P 500 and Nasdaq pulled back amid stretched tech valuations and AI investment concerns. Labour indicators and Treasury yields signalled growing economic uncertainty.
Read at London Business News | Londonlovesbusiness.com
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