Market Turmoil as Fed Cuts Rates While Global Uncertainties Grow.
In a pivotal week, the Federal Reserve cut rates by 25 basis points, while Fed Chair Jerome Powell warned inflation could linger above target until 2026. U.S. and global markets reacted sharply, with stocks plummeting and central bank actions signaling caution.
?? Fed Cuts Rates, Markets Still Worry
The Federal Reserve reduced its benchmark interest rate by 25 basis points to 4.25%-4.5%, marking the third cut this year. Despite the move, investor sentiment remained negative as Powell highlighted persistent inflation challenges and uncertainties tied to a new administration.
?? U.S. Stocks Suffer Heavy Losses
U.S. markets tumbled, with the S&P 500 dropping 3%, the Dow Jones losing 2.6% (1,123 points), and the Nasdaq plunging 3.6%. Small-cap stocks, represented by the Russell 2000, fell 4.4%, erasing $1.4 to $2.4 trillion in value in a single session.
?? Bitcoin and Yen Hit by Market Volatility
Bitcoin dropped 2.13% to $101,690, reflecting broader market jitters. Meanwhile, the yen weakened over 1% against the dollar after the Bank of Japan held rates steady at 0.25%, awaiting more wage data for policy changes.
?? Global Markets Follow Suit
Asian and European markets mirrored declines, with Japan's Nikkei 225 falling 0.7% and China's Hang Seng losing 0.5%. Australia’s S&P/ASX 200 and South Korea's Kospi shed 1.7% and 2%, respectively, as investors braced for economic uncertainties.