18/09/2025 Daily Reports
Fed moves: The Federal Reserve cut rates by 25bp, bringing the benchmark rate to 4.00–4.25%, its first cut of the year.
Dot plot signals: Policymakers expect two more cuts in 2025, potentially lowering rates toward 3.50–3.75% by year-end.
Market reaction:
Dow Jones (+0.5%) closed higher.
S&P 500 (-0.1%) slipped slightly.
Nasdaq (-0.3%) fell, pressured by tech.
Powell’s stance: Called the move a “risk management cut,” citing a weakening labor market and elevated inflation.
Labor market strain: Rising unemployment, especially among young and minority workers, signals risks of deeper job market cracks.
Inflation trend: Powell acknowledged goods prices driving inflation, partly due to tariff effects.
Corporate news:
Nvidia (-3%) hit by China’s ban on tailored AI chip orders.
General Mills beat earnings but warned of consumer weakness.
Oil prices: Held steady as traders eye lower borrowing costs potentially boosting demand.
Geopolitics: Trump met UK leaders and CEOs at Windsor Castle, with talks focused on AI, tech, and energy cooperation.
What’s Next?
The Fed’s move shows how delicate the balance has become: cutting rates to cushion a weakening labor market while inflation lingers above target. Markets may remain choppy, with the Dow fueled by easing optimism, but tech faces headwinds from both policy risks and geopolitics.
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The Nasdaq futures market has reached an all-time high in response to the Federal Reserve’s decision to reduce interest rates. Meanwhile, Intel has experienced a significant surge of 31% following its investment in Nvidia. Additionally, the Nikkei index has closed above 45,000 for the first time.
Global markets are experiencing a rally following the U.S. Federal Reserve’s decision to cut its benchmark interest rate by 25 basis points for the first time this year, with indications of further cuts to come. This dovish shift is fuelling a bullish “risk-on” sentiment, with Nasdaq futures hitting record highs in pre-market trading. The tech sector has been given a significant boost by a major announcement: Intel’s shares have surged by over 30% following Nvidia’s revelation of a $5 billion investment and a strategic collaboration with the chipmaker, which has also led to a rebound in Nvidia’s stock. This development is being closely monitored for its implications on leadership in the crucial AI and semiconductor industries.
The positive sentiment surrounding the Federal Reserve’s decision has extended to Europe, where markets are also experiencing an uptick, with technology stocks leading the growth. Germany is experiencing a favourable economic climate following the passage of its 2025 budget, which includes a €500 billion infrastructure fund to stimulate growth and investment. Meanwhile, the Bank of England’s decision to maintain interest rates and to slow quantitative tightening is contributing to a “lower-for-longer” interest rate environment in Europe.
In Asia, the Nikkei index closed above 45,000 for the first time ever, a significant milestone led by gains in technology and semiconductor stocks. The weaker yen, trading at 147-148 against the dollar, is also providing a supportive tailwind for Japanese exporters. While the Bank of Japan is widely expected to hold rates in its meeting this week, ongoing speculation about a possible future rate hike is keeping yen and interest rate volatility in play.
