Fed signals possible rate cut; Wall Street soars

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Fed signals possible rate cut; Wall Street soars

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. Like what you see? You can subscribe here.

Traders work on the floor of the New York Stock Exchange on July 25, 2023.

Angela Weiss | AFP | Getty Images

What you need to know today

Rate cut on horizonThe Federal Reserve expectedly

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at 5.25% to 5.50% on Wednesday, but Chairman Jerome Powell signaled

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in its September meeting. The Fed’s overnight borrowing rate, currently at its highest in 23 years, has held steady over the past year but is widely expected to come down this year as inflation begins to ease.

U.S. stocks rallyU.S. stocks

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after Powell said a rate cut in September was “on the table.” The

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closed 1.58% higher, the

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gained 2.64%, and the

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added 0.24%.

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soared 12.8%, its best one-day performance since Feb. 22, after better-than-expected results from rival

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brought chip bulls back.

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added 2% even as it reported a ******* loss and weaker revenue than what analysts had expected and named a

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.

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yields fell after the Fed announcement while

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rose.

Meta shines

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as second-quarter revenue grew 22% to $39.07 billion while net income jumped 73% to $13.47 billion, boosted by higher advertising on

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and

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. The results come a week after Alphabet reported an 11% increase in

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ad sales. Meta expects “significant capital expenditures growth in 2025 as we invest to support our artificial intelligence research and product development efforts.” The stock rose 7% in after hours trading.

Oil gainsU.S. crude oil futures rose 4% on Wednesday after ****** political leader Ismail Haniyeh was assassinated in Tehran. Iran accused ******* of the ********, which comes a day after ******* said it had eliminated a senior Hezbollah leader in Beirut. Oil also got a boost from declining U.S. oil and gas stockpiles, a positive sign for demand. The

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last traded at was last trading at $78.63 per barrel.

Japan currency interventionJapanese authorities

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, or $36.8 billion, to support the yen in July, official data showed. The size of the intervention was nearly in line with estimates and came after several warnings from authorities against heightened volatility in forex markets. The yen fell to a

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against the U.S. dollar in early July.

[PRO] Rate cut beneficiariesCNBC Pro

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the most when short-term rates start to decline. These names could surge if rates decline in the near future.

The bottom line

Nvidia shares soared and Meta pledged significant growth in capital expenditure in 2025 to support its AI ambitions, but chipmakers and their suppliers continue to face turbulence as the U.S. government seeks to curtail the exports of high-end chips to China.

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reported on Wednesday that the U.S. plans to unveil a new rule that will make it ******* for non-U.S. companies to export semiconductor manufacturing equipment to China, but that allies including Japan, the Netherlands and South Korea will be excluded.

Exports to China from countries including *******, Taiwan, Singapore and Malaysia will, however, be impacted by the U.S. rule, according to the report.

Shares of Dutch semiconductor equipment maker

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There’s also uncertainty surrounding

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, whose

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in extended trading on Wednesday after the chip-architecture firm’s tepid earnings forecast for the current quarter and the full fiscal year.

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‘s problems are not over, with

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the latest to say it would seek compensation for the disruptions caused by the software company’s botched upgrade in July.

Delta CEO Ed Bastian

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the massive IT outage cost the carrier around $500 million. The figure includes not just lost revenue from cancelled flights but “the tens of millions of dollars per day in compensation and hotels” over a ******* of five days, he said.

— CNBC’s Jordan Novet, Arjun Kharpal, Leslie Joseph and Ece Yildirim contributed to this report.

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#Fed #signals #rate #cut #Wall #Street #soars

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