Here are five important things investors should know to start the trading day:
1. Roller Coaster Ride
Market ups and downs Stock markets were unpredictable on Wednesday as investors reacted to the Federal Reserve’s decision on interest rates. At first, people were happy with the big 50-basis-point rate cut, but then it raised worries that the Fed might be preparing for economic trouble.
The Dow Jones Industrial Average ended 103.08 points lower (down 0.25%) after going up by as much as 375.79 points earlier. The S&P 500 dropped 0.29% after hitting a record high earlier, and the Nasdaq Composite fell 0.31%. Fed Chair Jerome Powell tried to calm fears about the economy, but stocks still went down.
2. Big 50
The Federal Reserve lowered its main interest rate by half a percentage point (50 basis points) for the first time since the 2008 financial crisis. It’s also the first cut since the start of the Covid pandemic, bringing the rate to a range of 4.75% to 5%.
The decision wasn’t agreed upon by everyone, as Fed Governor Michelle Bowman wanted a smaller 0.25% increase instead. Fed Chair Jerome Powell said they’re trying to bring prices down without causing a big rise in unemployment, which sometimes happens with inflation. Fed members expect to cut rates by another half point before the year ends.
3. Boeing’s Issue
Boeing will start furloughing thousands of U.S. executives, managers, and other staff, according to a memo from CEO Kelly Ortberg on Wednesday. The company is trying to cut costs as it deals with a strike of over 30,000 machinists.
Affected employees will take one week off without pay every four weeks while the strike continues. Ortberg and his team will also take pay cuts during the strike. This week, the company and the union held talks with a mediator, but the union said it was frustrated after Tuesday’s discussions.
4. Warehouse Pay
Amazon(which is founded by Jeff Bezos) is raising wages for its hourly warehouse workers. The average starting pay for front-line employees in the U.S. will be over $22 an hour, up from about $20.50 an hour, the company said on Wednesday.
Starting early next year, these workers will also get a Prime subscription as part of their benefits. This comes just before the busy holiday season, when online shopping usually increases.
5. WNBA Growth
The WNBA is thriving. This season, the league set new records for viewership and attendance, and its new media deal with Disney, NBCUniversal, and Amazon is worth more than triple its last one. On Wednesday, the league also announced a new team in Portland, the third in its current expansion.
However, players still earn modest salaries. Rookie star Caitlin Clark, who has helped boost the league’s popularity, makes around $76,000 this year, while top veterans earn about $200,000.
Summary
Investors should keep an eye on the markets as they react to the Fed’s rate cut. Boeing is dealing with worker strikes, Amazon is raising wages before the holidays, and the WNBA is growing in popularity and media deals, but players still don’t earn much.
