Markets Tumble After Fed Lowers Interest Rates—But Powell Won't Promise Another Cut

Core Points - The Federal Reserve has lowered interest rates for the second consecutive month, but market reactions were negative due to Fed Chair Jerome Powell's indication that further cuts may not occur this year [1][4] - The Federal Open Market Committee (FOMC) voted 10-2 to reduce rates by a quarter-point to a range of 3.75% to 4% [2] - The FOMC acknowledged a slowdown in job gains and a slight increase in the unemployment rate, while inflation remains elevated [3] Market Reactions - Following Powell's statements, the Dow Jones Industrial Average fell by 0.2% and the S&P 500 dropped by 0.3%, despite earlier gains driven by Nvidia's performance [4] - Boeing led declines in the Dow with a drop of 4.3%, followed by Nike at 3.1%, UnitedHealth Group at 3%, and Home Depot at 2% [4] Future Outlook - Investors are anticipating a potential additional quarter-point reduction in rates at the FOMC's December meeting, which could lower rates to between 3.5% and 3.75% [5] - The ongoing federal government shutdown has delayed key economic reports, complicating the Fed's ability to assess the economy's health [5][6] - Fed Governor Christopher Waller emphasized the need for caution in adjusting interest rates due to uncertainty in economic data [5] Leadership Considerations - There is speculation regarding President Trump's potential nomination to succeed Powell, with five candidates under consideration [7]