US markets displayed a mixed performance on Wednesday, concluding with the Dow Jones Industrial Average reaching 46,018 points, a 0.6% increase from the previous trading day.
Earlier in the session, the broader S&P 500 index registered a slight decrease of 0.1%, hovering around 6,600 points. The Nasdaq 100 also experienced a dip, closing at approximately 24,225 points, down 0.2%.
The Federal Reserve announced its initial interest rate reduction of the year shortly before the market’s closing hours. Analysts noted the move, a 25 basis point reduction, aligned with market expectations and was largely factored into prior trading activity. Projections within the “dots” chart released alongside the announcement indicated the potential for two further rate cuts of 25 basis points each in the remaining sessions of the current year.
The Fed’s statement appeared to emphasize the labor market’s current status, suggesting a heightened consideration of employment conditions as part of its dual mandate, potentially outweighing concerns about inflation. The “dots” chart also suggested that the majority of the anticipated interest rate reduction cycle might be concluded by the end of the year, with only a single 25 basis point move projected for each of the subsequent two years.
The newly appointed Federal Reserve Governor Stephen Miran cast a dissenting vote, advocating for a more aggressive 50 basis point rate cut, marking a notable debut. This action is being interpreted by some as indicative of political considerations influencing his position.
While the interest rate reduction initially appeared favorable to markets, analysts cautioned that it was largely anticipated and failed to generate a surprise boost. Consequently, the decision is unlikely to provide fresh impetus for a market rally.
The euro weakened against the dollar, trading at $1.1825, equivalent to €0.8457 per dollar.
Precious metals experienced a downward trend, with gold fetching $3,660 per fine ounce – a decrease of 0.8%, or €99.51 per gram.
Crude oil prices also declined. A barrel of Brent North Sea crude was priced at $67.88, a decrease of 59 cents, or 0.9% lower than the previous day’s closing figures.
