**Dow Jones, Steady at 0.0%, Nasdaq Up 1.51%**
**US Fed Cuts Interest Rates by 0.25 Percentage Points**
**Powell Praises “Good State” of US Economy**
**US 10-Year Treasury Yield Drops by 8 Basis Points, Dollar Calms**
[Seoul Economy]
Federal Reserve (Fed) Chairman Jerome Powell acknowledged positive aspects of the US economy, such as employment, inflation, and growth rates, which, combined with the momentum from Donald Trump’s presidential victory, boosted the New York stock market. The Fed announced a 0.25 percentage point cut in the benchmark interest rate, as expected by the market.
On the 7th (local time), the Dow Jones Industrial Average closed at 43,729.34 dollars, down by 0.59 points, a marginal decrease of 0.00%, essentially unchanged. The Standard & Poor’s (S&P) 500 rose by 44.05 points (+0.74%) to 5,973.10, while the tech-heavy Nasdaq Composite Index gained 285.99 points (+1.51%) to close at 19,269.46, marking record highs for both the S&P 500 and the Nasdaq.
That day, the Fed reduced the interest rate from the current 4.75–5.0% to 4.5–4.75%. This marks the second consecutive rate cut following a 0.5 percentage point reduction last September. Wall Street and investors had anticipated this 0.25 percentage point rate cut, so there was no significant market volatility. Chairman Powell, at a press conference, stated, “The employment indicators have normalized to pre-pandemic levels in 2019, and inflation and growth are also showing a positive trend, indicating a good state of the US economy.”
Brett Kenwell from eToro noted, “Powell and his colleagues emphasized that the US continues to maintain a solid economic foundation,” adding, “It was not surprising that Chairman Powell did not mention whether there would be a rate cut in December.”
Big tech stocks showed strong performance. Apple shares increased by 2.14%, Nvidia rose by 2.25%, and shares of Microsoft and Amazon climbed by 1.25% and 1.48%, respectively. Trump-themed stocks were volatile, with Trump Media & Technology shares plummeting by 22.97% after surging the previous day. Another Trump-related stock, private prison company GEO Group, jumped 13.63% following a 42% surge the day before. Zillow, a home-buying app, saw its stock rise by 23.77% after reporting a quarterly loss of 20 million dollars, significantly better than the market expectation of a 40 million dollar loss.
Key cryptocurrencies increased in value. Bitcoin traded at 76,365 dollars, up 0.5% from 24 hours earlier. Ethereum rose by 8.6% to 2,915 dollars.
US Treasury yields fell in response to the Fed’s rate cut. The yield on the 2-year Treasury note dropped by 5 basis points (1bp = 0.01 percentage point) to 4.217%. The 10-year Treasury yield decreased by 8.4 basis points to 4.341%.
New York oil prices closed higher. The initial strong dollar caused by Trump trade has subsided, leading to more buying. The price of West Texas Intermediate (WTI) for December delivery on the New York Mercantile Exchange rose by 0.67 dollars (0.93%) from the previous session to settle at 72.36 dollars per barrel. The global benchmark Brent oil for January delivery closed at 75.63 dollars per barrel, up 0.71 dollars (0.95%) from the previous session. The dollar index (DXY), which had surged 1.6% the previous day, fell by 0.73% today. The depreciation of the dollar is a factor in the rise of commodity prices.