Stock market updates, Fed decision
The Federal Reserve made a bold move Wednesday and cut interest rates by a half-point, the first rate cut in four years a sign the U.S. economy may be facing some headwinds. FOX Business is providing real-time updates on the markets, commodities and all the most active stocks on the move.
U.S. stocks bounced between gains and losses after the Federal Reserve cut interest rates by 50 basis points, the larger move is considered a bold one by investors. Stocks gave up gains to close lower following Chairman Jerome Powell's press conference.
All three of the major averages fell less than one percent with the Dow Jones Industrial Average and the S&P 500 still hovering near record levels.
Powell, in his 2:30 press conference, said the general health of the overall economy which has been clouded by persistent inflation, was solid and he doesn't think a recession is on the horizon. He down played the benefit the housing market may see with lower mortgage rates.
The spot price of Gold ticked up to $2,570 as of shortly after noon Eastern Time on Wednesday and drifted slightly below that level after the Federal Reserve cut interest rates by 50 basis points.
"For gold to rise and mark new all-time highs following the Fed meeting, interest rates would have to be cut by 50 basis points today and, in addition, further substantial interest rate cuts would have to be signaled very clearly," the Commerzbank note added ahead of the meeting.
"I think everything is just in anticipation of the Fed cutting rates… gold prices are also being supported by what's going on in the Middle East," said Daniel Pavilonis, senior market strategist at RJO Futures in a report by Reuters.
Through Tuesday, the price for front month gold futures for September was up 2.83% month-to-date, while it was up $501.90 or 24.34% year-to-date, according to Dow Jones Market Data.The price was $2,564 on Tuesday for the third highest close in history after it declined the prior two trading days.
The SPDR Gold Trust, the largest ETF backed by physical gold, has advanced over 23% this . year, outperforming the S&P 500's 18% rally.
Reuters contributed to this report.
| Symbol | Price | Change | %Change |
|---|---|---|---|
| GM | $48.92 | 1.41 | 2.96 |
| F | $11.04 | 0.14 | 1.24 |
| TSLA | $229.80 | 1.93 | 0.85 |
| TM | $176.68 | 3.53 | 2.04 |
Consumers looking to buy a new or used vehicle might anticipate better financing options after the Federal Reserve cut interest rates as expected, by 50 basis points. Still, those in the market for a new ride could still see sticker shock.
A new report from auto shopping guide Edmunds found prospective car buyers can expect an unpleasant surprise in financing for their next ride.
The report said three out of four used car shoppers are targeting an interest rate between 0 and 5%, but six out of 10 car buyers who financed a used vehicle purchase in July ended up with an interest rate between 6% and 11%.
Used cars are offered for sale at a dealership on July 11, 2023, in Chicago, Illinois. (Scott Olson/Getty Images)
The study also found that both new and used vehicle prices on dealership lots today are priced markedly higher than buyers plan on spending.
Car affordability as a whole is not expected to improve anytime soon, as auto insurance and maintenance costs continue to soar.
The Federal Reserve slashed the key lending rate by 50 basis points in what is being viewed as a more aggressive move to prop up the U.S. economy.
A "for sale" sign on a house in Philadelphia on Aug. 16, 2024. (Joe Lamberti/Bloomberg via Getty Images)
The housing market remains stagnant as many would-be buyers and sellers are holding off on making a move until they see a significant decline in mortgage rates, which have been elevated for years.
Mortgage rates have started to decline, falling last week to their lowest level in more than 18 months, with the average 30-year fixed rate note dropping to 6.20%. But will it matter whether the Federal Reserve cuts rates by 25 or 50 basis points?
While the federal funds rate is not what consumers pay directly, it affects borrowing costs for home equity lines of credit, auto loans and credit cards. Mortgage rates are also influenced by moves in the 10-year Treasury yield.
Currently, about 80% of mortgage holders have a rate below 5%, according to a Zillow survey.
If the Fed makes a cut on Wednesday as anticipated, rates are unlikely to come down enough to provide any real reprieve to would-be homebuyers.
Afifa Saburi, capital markets analyst at Veterans United Home Loans, told FOX Business recently that even with a cut, "potential savings are low for a prospective homebuyer hoping for rate improvement this year."
If the Federal Reserve cuts interest rates by 25 basis points or 50 basis points the move will impact the interest you are paying on your credit card.
However, either move is unlikely to make a big difference for your bottom line.
| Symbol | Price | Change | %Change |
|---|---|---|---|
| MA | $499.07 | -1.92 | -0.38 |
| V | $290.20 | -1.35 | -0.46 |
| DFS | $136.28 | -1.30 | -0.95 |
| JPM | $208.52 | -0.73 | -0.35 |
Bitcoin is hovering just below $60,000 after gaining over 120% from its 52-week low of $26,240.89 hit on September 27, 2023.
Support of crypto currencies have become a hot election issue with former President Trump recently launching his World Liberty Financial.
However, the feedback on that venture is murky.
At the end of the Federal Reserve's two-day meeting Wednesday policymakers are expected to pull the trigger, cutting interest rates for the first time since March 2020.
The move will pave the way for a new era of policy that will impact millions of everyday Americans and what they pay for personal loans, mortgages, credit cards and other lending options.
Senator Elizabeth Warren (D) Massachusetts slammed Fed officials for putting the economy at risk ahead of their long anticipated interest rate cut expected Wednesday. A move many say is late to the party.
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