US Markets Dip as Fed Signals Caution on Rate Cuts; Nvidia Hits $5 Trillion Milestone

Wall Street experienced a mixed session, with major indices closing significantly below their daily peaks. The Dow Jones saw losses, while the Nasdaq managed gains driven by Nvidia. The US Federal Reserve announced a 25 basis point interest rate cut, as anticipated. However, Federal Reserve Chair Jerome Powell's post-policy remarks dampened market sentiment, stating that a December rate cut is 'not a foregone conclusion' and noting a growing consensus among FOMC members to wait before resuming cuts. This hawkish tone reduced the probability of a December cut from 90% to 67%. Consequently, Wall Street futures declined, also reacting to earnings reports from Meta, Microsoft, and Alphabet. Gold futures also fell below $4,000 an ounce as lower interest rates typically support bullion prices. A major highlight was Nvidia crossing the $5 trillion market capitalization threshold, making it the world's third-largest economy by valuation. Attention is now focused on the meeting between US President Donald Trump and Chinese President Xi Jinping, though experts are skeptical of major breakthroughs. Upcoming earnings from Apple and Amazon are also keenly awaited.

Impact This news significantly impacts global markets. The Federal Reserve's monetary policy directly influences borrowing costs, investment flows, and currency valuations worldwide, including India. The performance of major tech companies like Nvidia, Apple, and Amazon impacts investor sentiment and global technology sector valuations. Geopolitical developments between the US and China can affect trade, supply chains, and global economic stability, with ripple effects on India. Rating: 9/10.

Difficult Terms Federal Reserve: The central banking system of the United States. Interest rate cuts: Reductions in the rate at which commercial banks borrow money from the central bank, intended to stimulate economic activity. Basis points: A unit of measure used in finance to describe the rate changes, equal to 1/100th of a percentage point (0.01%). FOMC: The Federal Open Market Committee, a body within the Federal Reserve responsible for setting monetary policy, including interest rates. Hawkish: Refers to monetary policy leaning towards higher interest rates to control inflation, often implying a slower pace of rate cuts. Bullion: Gold or silver in bulk form, typically uncoined and unminted. Market capitalisation: The total market value of a company's outstanding shares of stock. Summit: A meeting between heads of state or government.