Core Viewpoint - Citibank's decision to lower its base lending rate from 7.25% to 7.00% is a significant move that will impact consumers, businesses, and the overall economy [1] Group 1 - The reduction in the base lending rate is not merely a technical adjustment but has substantial implications for the market [1] - This change is expected to influence borrowing costs for consumers and businesses, potentially stimulating economic activity [1] - The adjustment reflects Citibank's response to current economic conditions and market expectations [1]

Core Viewpoint - Fed Chair Jerome Powell has pushed back against market expectations for a December rate cut, emphasizing caution due to low visibility in economic indicators, yet market sentiment remains optimistic about a potential cut by year-end [1][3]. Market Expectations - As of Thursday morning, traders assigned a 69% chance of a 25-basis-point cut at the December 10 meeting, with a prediction market indicating even higher odds at 74% [2]. Fed's Position - Powell stated that a further reduction in the policy rate at the December meeting is not guaranteed, highlighting a divided Federal Open Market Committee (FOMC) on future actions [3][4]. - Some FOMC members are concerned about inflation risks, while others focus on labor market issues, indicating differing economic forecasts and risk tolerances [4]. Economic Indicators - The ongoing government shutdown has delayed key macroeconomic indicators, which may influence the Fed's decision-making process [5]. - Powell suggested that higher uncertainty could lead to a pause in rate cuts, likening the situation to driving in fog where one must slow down [5]. Analyst Reactions - Goldman Sachs economist David Mericle described Powell's tone as unexpectedly hawkish, noting that the Fed Chair did not reference the September dot plot that suggested a likely cut [6]. - Despite this, Goldman Sachs maintains that a December cut is probable due to cooling labor market conditions and inflation nearing the 2% target [6][7]. - Bank of America's Aditya Bhave expressed skepticism about another rate cut, suggesting that the December decision could be contentious [8]. Potential Dissent - If the Fed opts for another cut, more hawkish officials may dissent, while a decision to hold rates steady could lead to dissent from more dovish members [9]. Market Reactions - Following Powell's remarks, the 10-year Treasury yield rose above 4.00%, indicating skepticism among bond traders regarding further easing [10]. - Despite negative reactions to Powell's comments, the S&P 500 closed lower after reaching record highs, with some analysts maintaining a bullish outlook on future market support from the Fed [11].

Market Overview - The S&P 500 slipped 0.2% from its all-time high, while the Nasdaq composite lost 0.6%. The Dow Jones Industrial Average gained 199 points, or 0.5% [4][5] - Markets reacted positively to President Trump's comments on US-China trade, describing his meeting with President Xi Jinping as a "12 out of 10" and announcing plans to reduce tariffs on Chinese goods [4][5] - Analysts caution that despite positive rhetoric, structural trade tensions remain unresolved, with expectations for a more significant agreement not met [4][5] Technology Sector - Tech stocks showed sharp divergences post-earnings, with Meta Platforms falling 11.3% due to higher spending plans for 2026, erasing part of its 28% gain this year [4][5] - Microsoft declined 2.5% despite reporting strong quarterly earnings, as concerns about slower Azure growth and rising investment costs emerged [4][5] - Alphabet rose 5.3% after exceeding profit and revenue expectations, highlighting the volatility within the tech sector [4][5] - Collectively, Alphabet, Meta, and Microsoft account for nearly 14.5% of the S&P 500's total market value, indicating their significant influence on market movements [5] Company-Specific Movements - Chipotle Mexican Grill's stock plummeted 18% after it lowered its sales growth forecast, citing persistent macroeconomic pressures [5] - Eli Lilly's stock increased by 1.7% due to strong sales of its diabetes and obesity drugs, leading to an upward revision of its annual guidance [5] - Sherwin-Williams gained 2% after beating profit estimates despite a softer demand outlook, while Visa advanced 1.5% on stronger-than-expected results [5] Bond Market and Economic Indicators - The 10-year US Treasury yield rose to 4.09% from 4.08% following comments from Federal Reserve Chair Jerome Powell, indicating that a December rate cut is not guaranteed [5] - Traders still anticipate a rate reduction later this year, but with decreased certainty, as reflected in CME Group data [5] - European markets saw declines, with France's CAC 40 dropping 0.9% and Germany's DAX shedding 0.2% after the European Central Bank maintained steady rates [5]

Bet_Noire / iStock via Getty Images Pre-Market Futures: Futures are trading lower on Thursday as we get ready for a spooky Friday. The major indices started the day hitting new all-time highs on Wednesday, but sank in the afternoon after Fed Chairman Powell suggested that a December rate cut is not a given and that data between now and the December meeting will be used to gauge the need for another cut. While the Fed did cut rates by 25 basis points yesterday, it was largely priced in. Both the Dow Jones ...

Group 1 - Federal Reserve Chairman Jerome Powell indicated that a rate cut in December is not guaranteed, suggesting a cautious approach to monetary policy moving forward [1] - President Trump announced a reduction in tariffs on Chinese goods, which may impact trade relations and economic conditions [1] - Microsoft and Alphabet reported earnings that exceeded market expectations, highlighting strong performance in the tech sector [1]

Core Viewpoint - Futures for the S&P 500 remained flat as Jerome Powell tempered market expectations regarding a potential interest rate cut in December, while the U.S. government agreed to reduce tariffs on Chinese goods [1] Group 1 - Jerome Powell's comments have led to a cooling of market expectations for a December interest rate cut, indicating a more cautious approach from the Federal Reserve [1] - The U.S. decision to cut tariffs on Chinese goods may have implications for trade relations and economic growth, potentially benefiting certain sectors [1]

Core Viewpoint - Federal Reserve Chair Jerome Powell cautioned against the assumption that another interest rate cut is imminent, highlighting the complexities of navigating an economy characterized by solid consumer spending but a slowdown in hiring [1] Economic Conditions - Consumer spending remains robust, indicating a strong demand side in the economy [1] - Hiring trends have shown a slowdown, suggesting potential challenges in the labor market [1] Monetary Policy Implications - Powell's remarks signal a careful approach to monetary policy, emphasizing that decisions will be based on evolving economic data rather than assumptions [1] - The Fed is likely to remain vigilant in assessing economic indicators before making further rate adjustments [1]

Core Viewpoint - Bond ETFs experienced a decline following Federal Reserve Chair Jerome Powell's indication that a rate cut in December is not guaranteed, which contradicted market expectations for a certain move [1][2]. Group 1: Federal Reserve Actions - The Federal Reserve lowered its benchmark federal funds rate by 25 basis points to a target range of 3.75% to 4% [1]. - Powell emphasized that a further reduction in the policy rate at the December meeting is not a foregone conclusion, highlighting differing views within the committee [2]. Group 2: Market Reactions - Following Powell's comments, futures markets reduced expectations for a December rate cut, with the probability dropping to about 66% from around 90% [2]. - Yields surged in response, with the 2-year Treasury yield increasing by 11 basis points to 3.6%, the 10-year yield rising by 9 basis points to 4.07%, and the 30-year yield climbing by 7 basis points to 4.6% [3]. Group 3: Bond ETFs Performance - The iShares 20+ Year Treasury Bond ETF (TLT) fell by 1%, while the iShares 7–10 Year Treasury Bond ETF (IEF) decreased by 0.65% [3]. - The 10-year yield has remained near 4%, reflecting a bounce off this key level as investors processed Powell's remarks [3]. Group 4: Economic Considerations - Powell noted ongoing risks related to inflation and employment, mentioning the government shutdown as a challenge to the Fed's data-driven approach [4]. - Despite Powell's cautious stance, markets anticipate approximately three additional rate cuts between now and mid-2026, with future moves dependent on economic data [5].

Core Viewpoint - Gold prices increased during the early Asian session due to potential dip-buying after a decline triggered by Fed Chair Powell's comments regarding the uncertainty of a December rate cut [1] Group 1 - The rise in gold prices is attributed to possible dip-buying activity [1] - The initial decline in gold was influenced by Fed Chair Powell's indication that a December rate cut is not guaranteed [1]

Core Viewpoint - The Federal Reserve has implemented a 25-basis-point rate cut, reducing the federal funds target range to 3.75%-4.00%, in response to market volatility [1] Group 1: Market Reactions - The crypto market experienced significant turbulence prior to the Federal Reserve's rate decision, with approximately $100 million in crypto positions liquidated in the hour leading up to the announcement, including $55 million related to Bitcoin [2] - Total 24-hour liquidations in the crypto market exceeded $550 million, indicating forced selling as volatility increased across leveraged markets [3] - Traders adopted a defensive stance ahead of the Fed's policy statement, anticipating potential pressure on risk assets [6] Group 2: Bitcoin Analysis - A derivatives trader noted that Bitcoin remains range-bound, with a critical threshold at $108,000; a failure to hold this level could lead to further losses [4][5] - Historical data shows that out of six FOMC meetings this year, five coincided with market corrections, with pullbacks ranging from -6% to -27%, suggesting a trend of Bitcoin selling off around FOMC events [7] - Peter Schiff criticized Bitcoin's performance, arguing that its decline amidst a gold pullback and a rising Nasdaq highlights its fragility as a "safe haven" asset [8]