By William Collins, consultant in stock markets – Eurasia Business News, September 17, 2025. Article no 1788
The U.S. Federal Reserve held a meeting today on September 17, where it announced a 25 basis point interest rate cut, marking the first rate cut of 2025. Following the announcement, the Dow Jones Industrial Average initially surged by around 500 points during the day, reflecting investor optimism. However, this rally was not sustained, and the Dow gave back much of these gains before ending somewhat higher.
Meanwhile, the S&P 500 and Nasdaq had mixed or negative reactions, with the Nasdaq continuing to lag. Fed Chair Jerome Powell’s press conference acknowledged ongoing labor market deterioration and inflation pressures, which stirred some market caution. Overall, the market showed a mixed response, with stocks starting strong after the rate cut but selling off somewhat after Powell’s comments.
Investors are focused on the Fed’s language in Powell’s press conference regarding future rate cuts and economic outlook.
Fed Decision and Outlook
The Federal Reserve cut interest rates by 0.25 percentage points on September 17, 2025, marking the first rate cut of the year. The federal funds rate was lowered to a range of 4% to 4.25%. This decision was driven primarily by signs of a weakening labor market, with job gains slowing and the unemployment rate rising, although it remains relatively low. Inflation remains elevated and has even trended higher recently, presenting a challenge for the Fed’s dual mandate of promoting maximum employment and stable prices.
The Fed’s Summary of Economic Projections showed expectations for moderate economic growth with inflation forecasts maintained but with elevated risks. The Fed signaled that two more rate cuts are likely before the end of 2025 as it balances the pressures of slowing employment and persistent inflation.
Chair Jerome Powell acknowledged the unusual economic conditions, pointing out the simultaneous presence of labor market weakness and inflation pressures, describing it as a challenging situation with risks on both sides. He emphasized the Fed’s careful approach in responding to these mixed signals and the priority now placed on supporting the labor market despite inflation concerns
European stocks showed mixed results
European stock markets showed generally cautious to mixed performance ahead of the US Federal Reserve announcement.
Overall, European investors took a cautious stance ahead of the Fed rate cut and closely monitored inflation data and corporate developments in the region
The STOXX Europe 600 index was nearly flat, closing slightly down by 0.08% at around 550.35 points, reflecting a cautious market stance awaiting the Fed’s rate decision.
The Euro Area’s main stock market index (EU50 or STOXX 50) ended marginally lower by about 0.06% to 5371 points after paring earlier gains.
Among major national markets, the FTSE Mib in Italy was the worst performer, falling 1.3% to about 41,955 points.
Paris’ CAC 40 declined by 0.5%, while Frankfurt’s DAX 40 edged up slightly by 0.1%, and London’s FTSE 100 rose by 0.2%.
Sector-wise, energy and basic resources indices saw declines, while technology stocks helped offset some losses.
Notable individual stock movements included a sharp rally of Puma shares (+16.7%) on takeover news and gains in Novo Nordisk (+2.9%) after an upgrade.
Asian stock markets resisted or dropped
Asian stock markets showed a mixed performance amid cautious sentiment ahead of the US Federal Reserve’s policy announcement.
- Japan’s Nikkei 225 traded flat to slightly positive with a 0.13% rise to about 44,960, while the broader Topix index slipped 0.4%.
- South Korea’s Kospi index declined by approximately 0.75%, and the tech-heavy Kosdaq fell 0.38%.
- Australia’s S&P/ASX 200 index dropped 0.63%.
- Hong Kong markets moved higher with the Hang Seng Index rising about 1.35% and the Hang Seng Tech Index jumping 3.43%, boosted by strong gains in certain technology stocks like Baidu which surged around 14%.
- China’s Shanghai Composite rose modestly by about 0.37%.
- Singapore experienced weakness with an 11.3% year-over-year plunge in non-oil domestic exports reflecting economic headwinds.
Gold and Silver prices
Gold prices retreated from the record highs touched on the previous day, influenced by profit-taking and a firmer U.S. dollar. Spot gold was trading around $3,659 per ounce, down approximately 0.7% from the previous close which had reached about $3,702.95. U.S. gold futures for December delivery settled near $3,700. Gold has surged about 41% year-to-date, driven by strong central bank purchases and safe-haven demand amid economic uncertainties.
Read also : Gold : Build Your Wealth and Freedom
Silver prices also declined on September 17, trading at around $41.85 per ounce, down about 2.5%. Silver followed gold lower due to similar profit-booking and dollar strength pressures.
Our community already has 160,000 readers, joins us !
Subscribe to our Telegram channel
Follow us on Telegram, Facebook and Twitter
© Copyright 2025 – Eurasia Business News. Article no. 1788
Eurasia Business News 