The Dow Jones Industrial Average staged a sharp reversal on Wednesday, briefly hitting a record before rolling over after Federal Reserve Chair Jerome Powell signalled that another rate cut in 2025 is far from guaranteed. The index fell 74 points, or 0.2%, to 47,632. The S&P 500 ended almost flat at 6,890, while the Nasdaq Composite outperformed, climbing 0.55% to a record close of 23,958.
At one point, the Dow had surged more than 300 points before Powell’s comments pulled markets lower. The Fed cut its benchmark rate by a quarter percentage point at the conclusion of its two-day meeting, the second reduction this year, taking the target range to 3.75% to 4%.
Powell pushes back on December expectations
Ahead of Wednesday’s decision, traders were pricing in another cut at the Fed’s December meeting. Powell cooled those expectations, saying there were “strongly differing views” among policymakers and that a move in December was “not a foregone conclusion.”
Bond yields reacted sharply, with the 10-year Treasury yield jumping back above 4%. Rate-sensitive names led Wall Street’s retreat, with consumer staples like Costco and McDonald’s losing ground, along with payment companies Visa and Mastercard.
Nvidia powers higher, megacaps in focus
Technology stocks again provided a bright spot. Nvidia rose 3.1%, closing at a market value above $5 trillion for the first time, an unprecedented milestone for a U.S. company. The AI chipmaker extended its winning streak to five days, following news of fresh partnerships including a $1bn stake in Finnish network giant Nokia.
Other megacap names are set to report earnings this week, with Microsoft, Alphabet and Meta releasing results after the close, followed by Apple and Amazon later in the week. Analysts say disappointment from the “Magnificent Seven” could weigh heavily on the broader market.
Local outlook
Looking at the local market, SPI futures are pointing to a 32-point drop, or 0.4%, at Thursday’s open. Investors will be watching results from Coles, IGO, Lynas Rare Earths and Mineral Resources, along with annual meetings at companies including JB Hi-Fi and James Hardie.
