US markets end lower after fed slashes interest rates

19 Sep 2024 Evaluate

The US market ended lower on Wednesday. Markets saw considerable volatility late in the trading session on Wednesday. The late-day volatility on markets came after the Fed decided to lower interest rates for the first time in over four years, aggressively slashing rates by half a percentage point. With the Fed saying officials have gained greater confidence inflation is moving sustainably toward its 2 percent target, the central bank lowered the target range for the federal funds rate by 50 basis points to 4.75 to 5.00 percent. The Fed was almost universally expected to cut rates for the first time since March 2020, but there was some debate over whether it would lower rates by 25 or 50 basis points.

The decision to opt for the larger rate cut came as the Fed said the risks to achieving its employment and inflation goals are roughly in balance. The economic projections provided by Fed officials at the meeting suggested the central bank will cut rates by another 50 basis points by the end of the year. Fed officials also expect to continue lowering rates next year, with the projections indicating rates will be lower by another full percentage point by the end of 2025. On sectoral front, Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets. However, gold stocks saw significant weakness as the price of the precious metal came under pressure in electronic trading, dragging the NYSE Arca Gold Bugs Index down by 1.4 percent.

Dow Jones Industrial Average fell 103.08 points or 0.25 percent to 41,503.1, Nasdaq dropped 54.76 points or 0.31 percent to 17,573.3 and S&P 500 was down by 16.32 points or 0.29 percent to 5,618.26.