FOMC divided on path for rate cuts

Market Performance - Nasdaq closed in the green, while the S&P was nearly unchanged and the Dow was down more than 70 points [1] - Nvidia became the first company to hit a $5 trillion valuation, up nearly 15% in the last five trading sessions [1] - Adidas shares dropped more than 10% due to weak sales in North America [1] - Gold settled back above $4,000 but pulled back in the last few hours [1] Federal Reserve (The Fed) Actions and Stance - The Fed cut interest rates by a quarter point, bringing the new range to 375 to 4% [4] - Fed Chair Powell signaled a more neutral stance on a December rate cut, disappointing markets [4] - Traders are pricing in a 30+% chance that rates will remain unchanged at the central bank's final meeting of 2025 [3] - The probability of a rate cut in January rose from 42% to 80% after the press conference [5] - Two descents occurred during the vote: one wanted a 50 basis point rate cut, and the other favored no rate change [7] Economic Indicators and Concerns - The Fed noted reasonably strong economic growth and a booming stock market [6] - The Fed is assessing whether it has taken out enough insurance against a potential weakening in the job market [9] - Inflation is still high, and core PCE is going up [15] - The market may be overly optimistic about future rate cuts, as the Fed indicated that unless data weakens meaningfully, they are not cutting in December [14]