"U.S. financial markets rallied this week as the Federal Reserve lowered interest rates for the first time since December 2024, cutting by a quarter of a percentage point. The move had been widely anticipated, but it reassured investors that the central bank is ready to support growth as the labour market shows signs of softening. The Fed's updated projections suggest that policymakers expect further cuts of up to half a percentage point"
"Equity markets responded positively, with the Nasdaq up 2.2%, the S&P 500 up 1.2%, and the Dow Jones Industrial Average up 1%. Smaller companies also benefited, with the Russell 2000 index advancing more than 2%, reflecting optimism that lower interest rates will ease financing costs. Retail sales offered another bright spot, rising 0.6% in August, beating expectations for the third consecutive month."
The Federal Reserve lowered interest rates by 0.25 percentage point, marking the first cut since December 2024 and signaling potential further easing of up to 0.5 percentage point by year-end. U.S. equities rallied on the move, with the Nasdaq, S&P 500, Dow, and small-cap Russell 2000 all advancing. Retail sales rose 0.6% in August for a third consecutive beat, while the housing market showed weakness with housing starts down 8.5% and subdued builder sentiment despite modest improvement from lower mortgage rates. A U.S.-China call advanced trade and technology negotiations, including agreement on U.S. ownership of TikTok. European markets showed mixed performance amid diverging monetary policies, with the STOXX 600 slightly lower and France’s CAC 40 rising; developments in Asia and China continued to influence the investment outlook.
Read at London Business News | Londonlovesbusiness.com
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