Fed Cuts Rates, Markets React as Economy Signals Mixed Outlook

Lead The Federal Reserve cut its benchmark rate by 25 basis points Wednesday, signaling two more cuts this year amid warning signs from heavy-truck sales and notable corporate moves, prompting a cautious market response.

Nut Graf The Fed’s quarter-point rate reduction to a 4.25%-4.50% range was widely expected, but projections for two additional cuts underscore ongoing concerns about growth. This decision comes as August heavy-truck sales plunged to four-year lows, and major companies launched significant transactions, highlighting a complex economic landscape.

Fed’s Forward Guidance The Fed approved its first rate cut since December and projected two further quarter-point reductions before year’s end, citing slowing manufacturing indicators and moderating inflation. Chair Jerome Powell emphasized that future moves will depend on incoming data, particularly labor market strength and consumer spending.

Heavy-Truck Sales Signal Slowdown Data from the U.S. Bureau of Economic Analysis revealed a 15% year-over-year drop in August heavy-truck sales, the steepest decline since 2021. Economists warn this slump-often a recession indicator-reflects weakening demand in manufacturing and construction sectors.

StubHub’s IPO Debut Online ticket reseller StubHub began trading on the NYSE under ticker “STUB,” pricing its IPO at $23.50 and valuing the company at $8.6 billion. CEO Eric Baker cautioned that revenue may dip roughly 10% initially as consumers adjust to all-in pricing mandated by new FTC rules, but called the impact “temporary”.

Corporate Investments and Market Impact

• GSK pledged $30 billion for U.S. R&D and manufacturing over five years, including a new biologics facility in Pennsylvania tied to President Trump’s U.K. state visit.
• U.K. pharmaceutical giant’s move bolsters transatlantic ties and is expected to support thousands of American jobs.

Market Reaction U.S. equities closed mixed: the S&P 500 edged down 0.1% ahead of the Fed announcement, while the Nasdaq slipped 0.3% on caution in tech stocks. Small-cap shares rallied on improved borrowing conditions, reflecting historical strength after Fed pauses. Treasury yields fell modestly, and the dollar strengthened against major currencies in anticipation of Powell’s press conference.

What’s Next Investors will parse the Fed’s updated dot-plot projections and Powell’s remarks for clues on economic resilience. Heavy-truck sales data and corporate earnings due later this week will also guide expectations for the central bank’s upcoming policy moves.