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US Federal Reserve Chairman Jerome Powell during a press conference following a meeting of the Federal Open Market Committee in Washington, DC, US, on Wednesday, December 18, 2024.
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This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Do you like what you see? You can subscribe here.
What you need to know today
Fed cautious about inflation and Trump’s policies
At its December meeting, the U.S. Federal Reserve officials expressed concern that inflation remains stubbornly above the central bank’s 2% target and the possible impact of US President-elect Donald Trump’s policies. Consequently, officials would be move more slowly on interest rate cutsaccording to the minutes published on Wednesday.
Stocks shrug off inflation concerns
US stocks barely gained small profit on wednesday even though he 10-Year Treasury Yield touched his highest since April after the publication of the Federal Reserve minutes. The pan-European Stoxx 600 the index lost 0.19%, give up previous gains after flash data from the European Commission showed that the EU economic sentiment indicator had fallen 1.7 points in December.
Doubt about quantum computing
NVIDIA CEO Jensen Huang said Tuesday that bringing “very useful quantum computers” to market could take 15 to 30 yearscausing quantum computing stocks to fall on Wednesday. Alan Baratz, CEO of D-wave quantumwhose shares fell more than 30%, said Huang is “completely wrong” – “Today at D-Wave we are commercial,” Baratz told CNBC.
Rolls-Royce benefits from the ultra-rich
Rolls-Royce automobiles on Wednesday saying is investing more than £300 million ($369.9 million) to expand its global headquarters. The investment will help it meet the growing demand of the ultra-rich, who have custom ornaments requested such as 18-karat gold sculptures, embroidery of more than 869,500 stitches and holographic paint finishes.
(PRO) Small Cap Index Near Correction
He Russel 2000 lost 0.48% in trading on Wednesday, bringing it closer to correction territory, which is typically considered a 10% drop from a recent high. TO bank of america The strategist explains why the benchmark index, which comprises the 2,000 smallest stocks in the Russell index, In December he ran into obstacles and could see more problems in the future.
The final result
On paper, the Federal Reserve’s December meeting minutes spelled bad news for investors. Officials were concerned about inflation and the impact of Trump’s stated policies (although Trump was not explicitly named).
“Almost all participants judged that upside risks to the inflation outlook had increased,” the minutes said. “Participants cited stronger-than-expected recent readings on inflation and the likely effects of potential changes in trade and immigration policy.”
As a result, Federal Reserve officials see the pace of future interest rate cuts slowing.
Upside risks to inflation, problematic policies for the economy and smaller-than-expected rate cuts: this is a potent and bitter brew for investors to swallow. The 10-year Treasury yield hit 4.730% during intraday trading, the highest since April.
However, stocks mostly ignored that warning and rose on Wednesday. He S&P 500 added 0.16% and the Dow Jones Industrial Average rose 0.25%. He Nasdaq Composite fell 0.06%: technology stocks such as Palantir, Advanced Microdevices and Microstrategy I had a rough day, but it’s still close to the flat line and not a precipitous drop.
Investors had apparently already priced in inflation warnings: Fed latest dot plotwhich projected just two quarter-point cuts in 2025, had already rattled markets when it was published in December.
Federal Reserve Governor Christopher Waller also provided some relief to investors. Speaking in Paris, saying The stubbornness of inflation recently had been driven primarily by “imputed” prices, such as those of housing services, while “observed” prices of other goods and services show disinflation.
Waller added that if economic conditions go his way, he would “support continuing to cut our policy rate in 2025.”
What isn’t taken into account as much is the US jobs report for December, due out on Friday. That could be the next catalyst for the markets.
— CNBC’s Jeff Cox, Sean Conlon and Pia Singh contributed to this report.
