Federal Reserve lowers interest rates by 0.25%, hints at two more reductions by year-end.
In today's economic landscape, several significant events have unfolded across the globe. Here's a summary of the key developments:
China's Tech Sector and Nvidia
The Cyberspace Administration of China has instructed the country's biggest companies to terminate orders for Nvidia's RTX Pro 6000D chip, causing a dip of more than 2% in Nvidia's shares. This decision could have far-reaching implications for the tech giant and the broader stock market today.
Fed's Monetary Policy and US Inflation
The Federal Reserve approved a quarter-percentage-point rate cut on Wednesday, as anticipated by the markets. Furthermore, there are expectations for two additional rate cuts before the year's end, with the markets expecting a 25 bp cut at the conclusion of today's FOMC meeting. However, concerns over the U.S. labor market have grown, indicating a complex economic landscape.
Inflation Rates in the UK and Eurozone
In the UK, the Aug CPI remained unchanged from July at +3.8% y/y, while in the Eurozone, Aug CPI was revised lower to +2.0% y/y. These figures suggest a slight easing of inflation rates in both regions.
Housing Market Trends in the US
Aug housing starts fell -8.5% m/m to 1.307 million, while Aug building permits unexpectedly fell -3.7% m/m to a 5.25-year low of 1.312 million. These figures indicate a slowdown in the US housing market today.
Stock Market Movements
Several tech giants, collectively known as the Magnificent Seven, have experienced a downturn, with Amazon.com, Tesla, Meta Platforms, Alphabet, and Microsoft all down more than -1%. Conversely, Walmart saw a rise of more than +2% after Bank of America raised its price target on the stock.
Bond Yields and Government Bonds
European government bond yields are moving lower today, with the 10-year German bund yield down -1.5 bp to 2.678%. Similarly, the 10-year UK gilt yield is down -1.6 bp to 4.623%. These trends suggest a flight to safety in the bond market.
Pharmaceutical and Biotech Sector
Roivant Sciences Ltd saw a surge of more than +12% due to positive results from a Phase 3 trial of its brepocitinib. On the other hand, Duolingo is down more than -3% due to an investigation by the Hungarian Competition Authority into the company's practices.
Upcoming Earnings Reports
Cracker Barrel Old Country Store and General Mills Inc are expected to release their earnings reports on September 17, 2025.
Stock Market Indices
The Dow Jones Industrials Index is up +0.77%, while the S&P 500 Index is up -0.17%. The Dow Jones today is up +0.77%, and the Nasdaq 100 Index is down -0.80%.
Central Bank Decisions
The European Central Bank announced in October 2025 that it might implement a negative rate cut of 25 basis points at its next meeting on October 30, 2025. T-notes have support from today's weaker-than-expected US Aug housing starts and building permits reports, as well as expectations that the Fed will cut interest rates by at least -25 bp at today's conclusion of the 2-day FOMC meeting.
Stock-Specific Developments
Progressive Corp (PGR) is down more than -1% due to a downgrade of the stock by BMO Capital Markets. Uber Technologies is down more than -4% due to signs of insider selling after an SEC filing showed CEO Khosrowshahi sold $28.6 million of shares last Friday. Zillow Group is up more than +3% after Bernstein upgraded the stock to outperform with a price target of $105. Workday is up more than +8% after Guggenheim Securities upgraded the stock to buy from neutral with a price target of $285. MasTec is up more than +1% after Wolfe Research upgraded the stock to outperform from peer perform with a price target of $227.
Negative Impact on T-Note Prices
Concerns about Fed independence are negatively impacting T-note prices, adding to the complexity of the current stock market today landscape.
