Market makes positive shift after Federal Reserve’s rate cut
Positive shifts in the main stock market averages marked the current trading ambiance as investors internalize the Federal Reserve’s latest rate reduction –the first one seen this year. Observers have tied the market sentiment tightly to anticipations of more easing, back by regular signals from several Federal officials suggesting probable additional rate cuts within this year.
Adding fuel to the narrative, Neel Kashkari, President of the Minneapolis Federal Reserve, posits that two further rate reductions may potentially be on the cards in 2021. In his assessment, he pointed to elements like a slackening labor market and high-level uncertainty. In his view, while close attention is being given to inflation, the potential risk factors that could demand more aggressive policy measures are lesser in the immediate term.
On a broader outlook, Apple seems to be spearheading the march upwards, following the worldwide release of the tech behemoth’s latest iPhone. Equally of note, FedEx’s earnings report, which surpassed expectations, also contributed positively to market movements.
As for commodities, gold appears to be making a comeback after experiencing significant drops the day prior, now fluctuating right above the $3,700 per ounce mark. In a show of volatility though, oil was trading lower, adding another bead to its string of fluctuating performances this week.
Taking a closer look at individual stocks, FedEx exceeded market predictions with its Q1 results while providing its forecast for FY26. Additionally, the much-anticipated iPhone from Apple hit the shelves this Friday. Rumor has it that Paramount Skydance might offer a sum of $22-$24 for each share of Warner Bros. Discovery, according to CNBC’s David Faber.
Feeding into global business discourse, President Donald Trump purportedly disclosed ongoing discussions about a ‘large scale’ Boeing purchase with Turkey. Adding some celebrity glamor to the mix, AMC Entertainment is planning to screen Taylor Swift’s album release film titled ‘Life of a Showgirl’ at its cinemas in the coming October.
Elsewhere in market activity, investor sentiment has been swayed by key ratings changes. Intel received an upgrade to ‘Buy’ status from ‘Hold’ by Benchmark, while Citi decided to downgrade it from ‘Neutral’ to ‘Sell’. Meanwhile, Stellantis was upgraded to ‘Buy’ at Berenberg, and UPS was downgraded to ‘Market Perform’ from ‘Outperform’ by BMO Capital.
Tesla was upgraded to ‘Outperform’ by Baird in the light of their belief that the company’s shares will outdo others due to its leading role in implementing physical AI. CoreWeave, too, started with a ‘Buy’ sentiment at Loop Capital. On the regulatory front, an antitrust investigation centered on Google’s Android operating system and its influence on Chinese phone makers has been dropped by China.
In the world of mergers and acquisitions, it is reported that Apollo is opening advanced discussions to acquire a majority share in Atletico Madrid. The proposal involves negotiating with the Spanish football club’s main shareholders to acquire their stakes. Reports have also suggested that Nvidia has invested more than $900M to hire Rochan Sankar, CEO of Enfabrica, as well as other team members, alongside licensing their technology.
In the sphere of technology and advancement, OpenAI – backed by Microsoft – plans to infuse a monumental $100B in backup servers to provision for AI advancements. The spotlight is also on SoftBank, whose proposed partnership with OpenAI aimed at serving Japanese corporate customers with AI solutions is, so far, lagging behind schedule.
Stock-specific news includes Fiverr’s rise in New York after a ‘Buy’ recommendation came from BTIG. Another notable performer is QuantumScape, showing growth on the back of reports from Parameter.io that suggest collaborations with Panasonic may be underway. Eos Energy gained attention after the launch of its DawnOS platform.
Some unfavorable moves include the fall of Hess Midstream LP shares due to a ‘Equal Weight’ downgrade from Wells Fargo. Patterson-UTI took a dip after announcing that Board member Lesli Beyer will be stepping down. Financial results were reported by MoneyHero, not in the company’s favor with a drop in both EPS and revenue compared to the previous year.
To round it off, other companies that have announced their financial results include Lennar with disappointing Q3 earnings and revenue, and Research Solutions with CEO Roy Olivier providing insight into the company’s transition, with the platform now accounting for nearly 40% of the total annual revenue. Meanwhile, Q1 earnings and revenue for Scholastic showed a year-over-year dip. Anticipation is high ahead of Micron Technology’s Q4 results announcement on September 23. Market movements ended with the Dow gaining 172.85 points, Nasdaq adding 160.75, and the S&P 500 increasing by 32.40.