Updates with US market close
Nasdaq gains; S&P 500 ends on red side of flat; Dow slips
Tech leads S&P sector gainers; Real Estate weakest group
Dollar rallies ~0.5%; crude gains; gold dips; bitcoin off >1.5%
US 10-Year Treasury yield jumps to ~4.07%
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WITH DECEMBER "NOT A FORGONE CONCLUSION," S&P 500 SUFFERS JUST A TINY CONTUSION
A divided U.S. Federal Reserve cut interest rates by a quarter of a percentage point on Wednesday and announced it will restart limited purchases of Treasury securities after money markets showed signs that liquidity was becoming scarce, a condition the U.S. central bank has pledged to avoid.
The rate cut, which included a nod to the data limits the Fed faces during the current federal government shutdown, drew dissents from two policymakers, with Governor Stephen Miran again calling for a deeper reduction in borrowing costs and Kansas City Fed President Jeffrey Schmid favoring no cut at all given ongoing inflation.
In his press conference, Powell said that U.S. central bank officials are struggling to reach a consensus about what lies ahead for monetary policy and that financial markets should not assume another interest-rate cut will happen at the end of the year.
"In the committee's discussions at this meeting, there were strongly differing views about how to proceed in December," Powell said at a press conference following the close of the Federal Open Market Committee's policy meeting. "A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it, policy is not on a preset course," he said.
Regarding Powell's remarks, Keith Lerner, Chief Investment Officer at Truist Advisory Services in Atlanta, said:
"Stocks initially went down as Powell pushed back on the market fully pricing in a rate cut in December but then bounced as he discussed his view that tariffs were more likely a one-time hit to inflation. He is trying to maintain optionality and flexibility."
In any event, the probability that the FOMC delivers another rate cut in December is now at 68% from around 84% just before Powell's press conference.
In the end, the S&P 500 index .SPX finished down around 0.004%. The benchmark index was up around 0.15% just before Powell delivered his remarks. The Dow .DJI closed lower by 0.16%.
That said, the Nasdaq Composite .IXIC finished up 0.55% and therefore is now tied with the S&P 500 in terms of record closing highs so far this year (both are now at 36).
The S&P 500 Tech .SPLRCT and Communication Services .SPLRCL sectors also scored record closing highs as did the chip index .SOX. Nvidia NVDA.O became the first company to surpass a $5 trillion valuation.
Markets now await Big Tech earnings with quarterly numbers from Microsoft MSFT.O, Alphabet GOOGL.O, and Meta Platforms META.O after the closing bell.
Apple AAPL.O and Amazon.com AMZN.O report after the close on Thursday.
Meanwhile, U.S. President Donald Trump began the final leg of his Asia trip, saying he had reached a trade deal with South Korea and was optimistic about an agreement with China's Xi Jinping. Talks between the two are set for Thursday in the port city of Busan.
(Terence Gabriel, Sinéad Carew)
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EARLIER ON LIVE MARKETS:
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