ADDX GO Market Morning Wrap - 18th Sep

Stock Market  

On Wednesday Eastern Time, the Federal Reserve cut rates by 25 basis points as expected, sending the three major indices on a rollercoaster ride, ending with mixed results. Fed Chair Jerome Powell stated that this move does not signal the start of a prolonged easing cycle, dampening market bullish sentiment.  

 

 

Large tech stocks showed mixed performance: Nvidia fell 2.62%, Amazon dropped 1.04%, Google A declined 0.65%, Meta eased 0.42%, Microsoft rose 0.19%, Apple gained 0.35%, and Tesla climbed 1.01%.  

 

Ride-hailing company Lyft soared 13% after Google’s Waymo announced a partnership with Lyft to launch self-driving taxi services in Nashville next year, while rival Uber slipped 5%.  

 

Human resources cloud provider Workday jumped 7.25% following reports that activist investor Elliott Management has taken a stake worth over $2 billion in the company.  

 

Online ticketing platform StubHub fell more than 6% on its debut day, marking a reversal in one of the hottest IPO markets in recent years.  

 

The Fed announced its first rate cut of 2025 as expected, lowering the federal funds rate target range by 25 basis points to 4.00%-4.25%. The dot plot suggests two additional 25-basis-point cuts this year.  

 

During the press conference, Powell noted that US economic growth has slowed in the first half of the year, while inflation “has risen and remains relatively high”; meanwhile, downside risks to the labor market have increased, with the market less active and showing slight weakness.  

 

Powell emphasized that, given clear signs of cooling in the labor market, the Fed is shifting its dual mandate focus from long-term inflation control toward greater attention to “full employment.”  

 

Disappointing some traders, Powell described the move as a “risk management rate cut,” suggesting it’s a preventive step amid economic slowdown risks. “There’s no risk-free path forward, and the next steps aren’t obvious,” he said.  

 

Michael Rosen, Chief Investment Officer at Angeles Investments, commented, “Powell threw cold water on expectations for a more aggressive easing path. He acknowledges labor market softness but feels it’s not severe enough for larger cuts yet.”  

 

Rosen added, “The Fed also raised its inflation outlook, indicating it must strike a delicate balance between supporting jobs and controlling inflation in policymaking.”  

 

Christopher S. Rupkey, Chief Economist at FWDBONDS, stated, “Overall, the Fed didn’t panic at its September meeting, opting for the smallest rate cut. They’ve moved away from viewing tariff-driven inflation as the top threat, prioritizing labor market slowdowns—stagflation risks have given way to employment concerns.”  

Global Hotspots  

Fed Cuts Rates by 25 Basis Points, Dot Plot Signals Two More This Year  

 

The Fed decided on Wednesday to lower the benchmark rate by 25 basis points, with two more cuts expected this year. Policymakers noted in their statement that increasing signs of softening in the labor market prompted the first rate cut since December, though “inflation has risen and remains relatively high.”

 

Fed officials said the unemployment rate “has edged up but remains low,” with growing downside risks to the job market. The Federal Open Market Committee (FOMC) approved the cut with an 11-1 vote, adjusting the federal funds rate target range to 4.00%-4.25%, unchanged for five prior meetings.

 

The lone dissent came from newly sworn-in Governor Stephen Milan, who favored a 50-basis-point cut. Two officials—Michelle Bowman and Christopher Waller, who supported a cut in July—backed the 25-basis-point move this time. The updated dot plot now projects two additional 25-basis-point cuts this year (one more than June’s forecast), with one cut each in 2026 and 2027.

 

Powell: Rate Cut a Risk Management Decision, Shifting Focus from Inflation to Jobs

 

On Wednesday Eastern Time, after the Fed’s expected 25-basis-point cut, Chair Powell addressed the move as a risk management decision, with no need for rapid rate adjustments.

 

In the press conference, he highlighted that US economic growth has slowed in the first half, while inflation “has risen and remains relatively high”; meanwhile, labor market downside risks have increased, with the market less active and slightly weak.

 

Powell stressed that, with clear signs of labor market cooling, the Fed is shifting its dual mandate focus from long-term inflation control toward greater emphasis on “full employment.”

 

Canada Central Bank Cuts Rates by 25 Basis Points, Cites Downside Risks

 

On Wednesday local time, the Bank of Canada lowered its benchmark rate by 25 basis points to 2.50%, in line with expectations, marking the first cut in six months. It signaled readiness for further reductions if economic risks grow in the coming months.

 

The bank said the 25-basis-point cut reflects a weak labor market and reduced concerns over inflationary pressures. Governor Tiff Macklem noted that negative impacts from US tariffs add significant uncertainty to the economic outlook. “But as the economy weakens and upside inflation risks ease, the governing council believes lowering rates better balances the outlook risks.”  

 

Saudi Arabia and Pakistan Sign Mutual Defense Pact  

 

Saudi Arabia and Pakistan signed a defense agreement stating that an attack on one will be considered an attack on both.

 

A joint statement from the Saudi Press Agency on Wednesday highlighted the pact as a commitment to enhance their security, promote regional and global peace, and develop defense cooperation to strengthen joint deterrence against aggression.  

 

Zelensky Meets European Parliament President, Discusses EU Accession  

 

Ukrainian President Zelensky met with European Parliament President Roberta Metsola on the 17th local time and jointly held a press conference, marking her fourth visit to Ukraine during the Russia-Ukraine conflict.

 

Zelensky posted on social media that they held in-depth discussions on key issues between Ukraine and European institutions, including the negotiation process for EU membership, emphasizing the urgency of starting the first “cluster” talks.  

Corporate News  

Reddit Seeks New Content Licensing Deal with Google  

 

Reddit is in early talks with Alphabet’s Google to secure a new content licensing agreement. As its data plays an growing role in search results and generative AI training, Reddit aims for higher returns in future deals. Insiders reveal that after a first agreement with Google (valued at about $60 million) 18 months ago, Reddit is discussing deeper data integration into Google’s AI products.

 

Reddit proposes a new model to boost user engagement in popular forums, leveraging Google’s traffic for growth and providing more data for future AI training. It also plans to explore future deal structures with Google and OpenAI, which has a similar pact, potentially introducing dynamic pricing. With Reddit content’s rising importance in AI Q&A, the company seeks higher licensing fees.  $RDDT 

 

Nvidia’s Jensen Huang: UK AI Data Centers Will Need Natural Gas  

 

On Wednesday local time, Nvidia CEO Jensen Huang said the UK needs natural gas to power its new large AI computing centers. In an interview, he expressed hope that gas turbines could play a role alongside nuclear and renewable energy to support the UK’s AI infrastructure.

 

He acknowledged that Britain’s electricity prices are currently the highest in Europe, posing a “challenge” to Prime Minister Starmer’s AI ambitions “in the short term.” Still, Huang expressed full confidence that the UK will recognize the energy needs for building emerging industries.  $NVDA 

 

Amazon Launches “Shop Assistant” AI Agent to Manage Seller Operations  

 

E-commerce giant Amazon announced on Wednesday the addition of an AI agent feature to its Seller Assistant tool, available 24/7 to handle daily store management tasks for sellers. Amazon stated, “Our AI agent is designed to seamlessly cover the entire selling experience, allowing sellers to shift from managing all tasks themselves to collaborating with a proactive smart assistant while retaining full control.

 

Seller Assistant can handle everything from daily operations to complex business strategies, freeing sellers to focus on product innovation and growth.” The feature is powered by Amazon’s Bedrock AI platform, utilizing its in-house Nova model and Anthropic’s Claude model, in which Amazon has invested.  $AMZN 

Forex & Commodities  

WTI October crude futures fell 0.73% to $64.05 per barrel; Brent November crude futures dropped 0.76% to $67.95 per barrel.  

 

COMEX gold futures declined 0.82% to $3,694 per ounce; COMEX silver futures fell 2.15% to $41.99 per ounce.  

 

The US Dollar Index, measuring the dollar against six major currencies, rose 0.25% to close at 96.876 in late forex trading.  

Key Events  

Gundlach: Gold Price “Almost Certainly” Above $4,000 by Year-End  

 

After the Fed’s rate decision, “new bond king” Gundlach commented on gold, noting its price has risen over 100% in the past two years and 45% so far this year, calling the trend “wild.” He said, “Even gold miners are jumping in, signaling retail investors joining the momentum trade.”

 

Gundlach, a long-time gold bull who predicted $4,000 earlier this year, now expects a further $340 rise, or about 9.2%. “I think gold will almost certainly close above $4,000 by year-end.”  

Cryptocurrency  

Bitcoin fell 0.23% in 24 hours to $116,538.  

 

Ethereum (ETH-USD) rose 1.87% to $4,592.  

 

XRP (XRP-USD) gained 1.18%, BNB (BNB-USD) rose 3.51%, and Solana (SOL-USD) increased 2.92%.  

 

Dogecoin (DOGE-USD) rose 4.19%, and Cardano (ADA-USD) gained 3.27%.  

Key Events  

Citi Updates Ethereum Forecast: Base Case Sees $4,300 by Year-End  

 

Citi has revised its Ethereum outlook, predicting a base-case drop to $4,300 by year-end, below the current $4,515. However, it also forecasts a bull-case rise to $6,400 and a bear-case fall to $2,200.