Fading chance of December interest rate cut sends stocks tumbling
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Stocks tumbled on Thursday as chances of a December rate cut appeared to fade. Limited time: Save 25% on NBC News subscription Get exclusive reporting, live Q&As and ad-free reading. The S&P 500 ended down 1.6%, the Nasdaq Composite closed lower by 2.3%, and the Russell 2000 dropped 2.9%. The Dow Jones Industrial Average also fell by 797 points after hitting a record high on Wednesday. The tech sector was one of the worst impacted with shares of Dell Technologies falling 4.8% as Nvidia tumbled 3.
AI Summary
Main Idea: Stocks fell sharply as fading hopes for a December Federal Reserve rate cut shook markets, while Jerome Powell and other Fed officials gave mixed signals about the next move.
Key Points:
- The S&P 500, Nasdaq, Russell 2000, and Dow all dropped, with tech stocks taking a heavy hit.
- Traders now see less than a 50% chance of a Fed rate cut at the next meeting, down from more than 90% two weeks ago.
- Powell said a December cut is not certain, and several Fed officials have signaled they may prefer to pause.
- The government shutdown left key jobs and inflation data missing, making it harder to judge the economy and the Fed’s next step.
Impact on the People
Negative Impact
A delayed Fed rate cut can keep borrowing costs higher for households and small businesses, and the stock drop can hurt retirement savings.
Positive Impact
No clear positive impact identified.
How did each entity affect people?
Rate how each entity in this article affected the American people.
- Primary:Federal Reservegovernment agency or body
- Primary:Governor Jerome Powellperson
Candidate Entities12 candidates · 5 weighted vote min · 70% decision
- Federal Reservegovernment agency or bodyPrimaryEvaluated
Central institution whose expected December interest-rate decision drives the market selloff.
Include 0 (0%)Ignore 0 (0%)5 to threshold - Governor Jerome PowellpersonPrimaryEvaluated
Federal Reserve chair whose comments about a December cut are a key trigger for the article’s main market.
Include 0 (0%)Ignore 0 (0%)5 to threshold - Alberto MusalempersonMajorAI selected
Named Federal Reserve regional president cited as sounding cautious about another rate reduction.
Include 0 (0%)Ignore 0 (0%)5 to threshold - Austan GoolsbeepersonMajorAI selected
Named Federal Reserve regional president cited as sounding cautious about another rate reduction.
Include 0 (0%)Ignore 0 (0%)5 to threshold - Christopher WallerpersonMajorAI selected
Federal Reserve governor identified as leaning toward further rate cuts.
Include 0 (0%)Ignore 0 (0%)5 to threshold - Dell TechnologiescompanyMajorAI selected
Major stock mentioned as falling sharply during the selloff.
Include 0 (0%)Ignore 0 (0%)5 to threshold - Governor Stephen MiranpersonMajorAI selected
Newly installed Federal Reserve governor whose pro-cut stance is part of the divided Fed discussion.
Include 0 (0%)Ignore 0 (0%)5 to threshold
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