The initial sugar rush from the Fed's bold rate cut has subsided, leaving investors facing a more sobering reality. While the S&P 500 surged after the cut, its momentum has tempered as investors recognize that sustainable growth, not just rate cuts, will drive stock valuations. The market remains divided on the Fed's next move, with some fearing they are behind the curve while others warn of excessive easing.
The sugar rush from the Fed ’s bold rate cut is still cascading through global markets, but after Wall Street’s post-cut euphoria, the local rally took a step back, giving way to a more sobering reality. The S&P 500’s surge has tempered as investors start to realize that, at some point, it’s not rate cuts but actual growth that’ll need to carry the weight of stock valuations. We’re in that weird zone of the cycle where everything feels out of sync.
In Asia, Nikkei futures point to a decent bump at the local open, fueled by the yen’s recent slide, though higher yields on longer-term U.S. Treasury yields could cool some of that optimism. Japan’s and China’s monetary policies were also in the spotlight last week, and both delivered mixed signals. The Bank of Japan, as expected, held rates steady but made it clear it’s not rushing to hike again.
FED Rate Cuts Stock Market Inflation Election
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