Wed Sep 18 01:53:01 UTC 2024: ## Fed Rate Cut Sends Stocks on Rollercoaster Ride
**New York, NY** – The stock market experienced a volatile day on Wednesday, initially surging to all-time highs after the Federal Reserve announced a half-point interest rate cut. However, the rally quickly fizzled out as Fed Chair Jerome Powell’s press conference signaled a less aggressive easing stance than some investors had hoped for.
The S&P 500 ended the day down 0.3%, while the Nasdaq 100 dropped 0.5%. The Dow Jones Industrial Average lost 0.2%, and the Russell 2000 Index of small-cap stocks remained largely unchanged.
The market’s initial exuberance stemmed from the Fed’s decision to cut rates by 50 basis points, its first rate reduction since March 2023. However, Powell’s comments suggesting a more measured approach going forward dampened investor enthusiasm.
“It’s impressive that in the classic, ‘buy-the-rumor, sell-the-fact’ dynamic, the ‘fact’ of a 50 basis-point cut was still met by selling,” said Ian Lyngen and Vail Hartman of BMO Capital Markets.
Analysts noted that the market is now pricing in further rate cuts this year, but not to the same degree as policymakers. The Fed’s own projections indicate just a half-point of additional easing in 2024, with another percentage point of cuts anticipated in 2025.
“Powell made it clear that today’s decision was not a crisis rate cut but instead a normalization of monetary policy from a very restrictive level,” said Kristina Hooper at Invesco.
Despite the initial disappointment, many experts believe the Fed’s actions will ultimately benefit the stock market in the long run. “Don’t let the thought of rate cuts scare you,” said Callie Cox at eToro. “The Fed is cutting in celebration of controlled inflation, not in desperation.”
The market’s future direction will depend heavily on the economic data, with many analysts expecting a continued decline in inflation and a soft landing for the economy.
In other market news, Google won a court fight with the European Union over a €1.5 billion ($1.7 billion) fine for thwarting competition for online ads. T-Mobile US outlined its growth ambitions for the next three years, forecasting higher profits fueled by customer gains and new technologies. 23andMe Holding Co. CEO Anne Wojcicki confirmed her commitment to taking the genetic testing company private.
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