U.S. Stocks Jump After Fed Signals an Opening for Additional Interest-Rate Cuts

US equity futures declined following Oracle's disappointing earnings report, which revealed a significant drop in cloud sales and a surge in AI spending. This comes after the S&P 500 experienced its largest gain on a Fed decision day since March, highlighting investor volatility. Additionally, US forces seized a sanctioned oil tanker off Venezuela's coast, escalating geopolitical tensions.

The Federal Reserve has announced a cut in its federal funds rate, which may lead to lower mortgage rates for home buyers, sellers, and builders. This decision is seen as a potential boost for the housing market, although the exact impact will not be clear until late January.

Copper prices surged to a record high following the Federal Reserve's anticipated interest rate cut and an upgraded growth forecast for the US economy. This increase reflects heightened investor confidence in the metal's demand amid tightening supply dynamics.

Federal Reserve Chair Jerome Powell indicated that Fed staffers believe federal job creation data may be overstating actual job growth by as much as 60,000 jobs per month, suggesting a potential contraction in the job market. This revelation raises concerns about the accuracy of economic indicators that inform policy decisions.

The Federal Reserve has cut interest rates, signaling a cautious approach to further easing amid significant internal dissent among its officials. Three members expressed differing views on the decision, highlighting the complexities of the current economic landscape characterized by stalled inflation progress and a cooling job market.

The Federal Reserve's recent meeting yielded a less-hawkish outcome than anticipated, providing relief to Asia's markets across various asset classes, according to analysts. This development is expected to positively influence investor sentiment and market stability in the region.

Asian equities experienced gains following a positive sentiment on Wall Street, driven by the Federal Reserve's recent interest rate cut and optimistic remarks from Chair Jerome Powell regarding the US economy's potential recovery as inflationary pressures from tariffs diminish.

Top economist Diane Swonk has warned that Federal Reserve Chair Jerome Powell risks undermining the Fed's credibility by making decisions influenced by artificial intelligence and immigration factors, particularly in light of the current labor market's challenges. Swonk's analysis highlights the precarious state of the economy as it transitions into 2025, characterized by a 'low-hire, low-fire' environment.