"This article will be updated throughout the day, so check back often for more daily updates. As expected, the Federal Open Market Committee (FOMC) announced a 0.25% reduction in its target interest rate yesterday, to a range of from 3.75% to 4% - but the stock market reacted almost not at all. The Vanguard S&P 500 ETF ( NYSEMKT: VOO) gained less than 0.1% yesterday, and it's down a sizeable 0.5% in early trading this morning."
"This is despite some arguably good news out of Asia, where President Trump has concluded a new trade deal with Beijing that should see the threat of 100% additional tariffs removed, tariffs in punishment for China's role in the fentanyl trade reduced to 10%, Chinese restrictions on rare earth magnet exports postponed by a year, and Chinese purchases of U.S. soybeans resumed. This sounds like good news for American companies that rely on rare earth magnets to build their products - good news too for American farmers."
The Federal Open Market Committee reduced its target interest rate by 0.25 percentage point to a 3.75%–4% range. U.S. equity indexes showed minimal positive reaction, with the Vanguard S&P 500 ETF barely rising yesterday and falling about 0.5% in early trading today. A new U.S.-China trade deal removed the threat of 100% additional tariffs, cut fentanyl-related punishment tariffs to 10%, postponed Chinese rare earth magnet export restrictions by a year, and resumed Chinese purchases of U.S. soybeans. Those trade developments should benefit manufacturers using rare earth magnets and U.S. farmers. Earnings reports from large tech and AI firms appear to be tempering investor enthusiasm.
Read at 24/7 Wall St.
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