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Federal Reserve Chairman Jerome Powell speaks at a press conference following the Federal Open Market Committee meeting on Wednesday, December 18, 2024 in Washington, DC, the United States.
Al Drago | Bloomberg | Getty Images
This report comes from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open keeps investors updated on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Fed cautious on inflation, Trump policies
At the December meeting, the U.S. Fed officials have expressed concern that inflation will remain stubbornly above the central bank’s 2% target and the possible impact of U.S. President-elect Donald Trump’s policies. Therefore, officials will The pace of interest rate cuts slowsMinutes of the meeting released on Wednesday showed.
Stocks shake off inflation worries
U.S. stocks struggle Small gains on Wednesday although 10-Year Treasury Bond Yield touch it highest since April After the release of the Fed meeting minutes. Pan-European Stoke 600 The index fell 0.19%, give up previous achievements back flash data European Commission data showed that the EU economic sentiment index fell by 1.7 points in December.
The debate over quantum computing
NVIDIA CEO Jensen Huang said on Tuesday that bringing “very useful quantum computers” to market could It takes 15 to 30 yearscausing quantum computing stocks to plummet on Wednesday. Alan Balazs, Chief Executive Officer D wave quantumThe stock price plummeted more than 30%, calling Huang a “Big mistake” — “We at D-Wave are commercialized today,” Balazs told CNBC.
Rolls-Royce benefits from the super rich
Rolls Royce Wednesday explain The company is investing more than £300 million ($369.9 million) to expand its global headquarters. The investment will help it meet the growing needs of the super-rich, who have Request custom decoration Examples include 18-karat gold sculptures, over 869,500 stitches of embroidery and holographic lacquer finishes.
(PRO) Small-cap index nears correction
this Russell 2000 It fell 0.48% in Wednesday trading, approaching correction territory, which is typically seen as a 10% drop from recent highs. one Bank of America Strategists explain why this benchmark, made up of the smallest 2,000 stocks in the Russell index Hitting a roadblock in December And may get into more trouble.
bottom line
On paper, the minutes from the Fed’s December meeting were bad news for investors. Officials worry about inflation and the impact of Trump’s stated policies (although Trump doesn’t explicitly name them).
“Nearly all participants agreed that upside risks to the inflation outlook had increased,” the minutes said. “Participants cited recent stronger-than-expected inflation data and the possible impact of potential changes in trade and immigration policy.”
As a result, Fed officials expect the pace of interest rate cuts to slow down in the future.
Upside risks to inflation, problems with economic policy and a smaller-than-expected interest rate cut: this is a strong but bitter drink for investors. In intraday trading, the 10-year Treasury yield hit 4.730%, the highest level since April.
However, stocks mostly ignored the warning on Wednesday and continued to rise. this S&P 500 Index 0.16% was added, and Dow Jones Industrial Average up 0.25%. this Nasdaq Composite Index Down 0.06% – Technology stocks such as Palantir, AMD and micro strategy Had a rough day – but still closer to flatline rather than a steep decline.
Investors appear to have priced in Fed’s inflation warning Recent clicksThe plan, which foresees just two quarter percentage points of interest rate cuts in 2025, shocked markets when it was released in December.
Federal Reserve Governor Christopher Waller also provided some comfort to investors. When he spoke in Paris explain The recent stubbornness of inflation has been driven largely by “imputed” prices for things like housing services, while “observed” prices for other goods and services point to deflation.
Waller added that if economic conditions develop in his view, he would “support continued lowering of policy rates in 2025.”
Friday’s U.S. jobs report for December was not factored into prices. This could be the next catalyst for the market.
—CNBC’s Jeff Cox, Sean Conlon and Pia Singh contributed to this report.
