Wall Street Whipsawed as Fed Kicks Off Rate Cuts

The much-anticipated Fed meeting delivered exactly what Wall Street expected: a 25-basis-point rate cut, the first of the year, lowering the federal funds rate to 4.00–4.25%.

Initially, stocks surged. But once Fed Chair Jerome Powell took the microphone, the rally quickly lost steam.

Powell’s Reality Check

Powell admitted what everyone already knew but didn’t want to hear: the Fed is flying blind between two cliffs, weakening job growth and still-stubborn inflation. “There is no risk-free path,” he said, dashing hopes of a smooth ride ahead. Markets flipped intraday as a result.

• Dow Jones gained +0.6%

• S&P 500 finished flat after a wild swing

• Nasdaq slipped -0.3%

Adding fuel to the drama was Stephen Miran, Trump’s newly appointed Fed governor, who voted for a deeper cut of 50 basis points. That move sparked chatter about political pressure creeping into monetary policy, though Powell pushed back strongly, stressing the Fed’s independence.

The IPO That Fell Flat

While Powell stole headlines, StubHub (STBH | –6.0%) stumbled badly in its Wall Street debut. Priced at $23.50 per share, the ticket-resale platform dropped below its IPO level, leaving its $8.6 billion valuation looking less shiny.

Founder Eric Baker may still control 88% of the voting rights, but that didn’t stop investors from hitting the sell button.

Winners and Losers in Tech & Media

Not all the action was gloomy. Lyft (LYFT | +13,13%) jumped to its highest level since May 2022 after announcing a partnership with Alphabet’s Waymo to launch robotaxis in Nashville next year, a direct jab at Uber (UBER | –4.99%), which took the punch square on the chin.

Netflix (NFLX | +2.33%) also got some love. Loop Capital upgraded the stock to “Buy” and raised its price target to $1,350, betting on strong content momentum and expanding margins. If management delivers on its goal of 40% profit margins by 2030 (up from ~35% today), shareholders could be in for a binge-worthy payoff.

Meanwhile, Alibaba (BABA | +2.44%) caught a tailwind on news of a major AI chip order from China Unicom. But the backdrop for Chinese tech remains complicated, Beijing regulators are clamping down on purchases of Nvidia’s customized RTX Pro 6000D chips, signaling growing confidence in domestic alternatives.

Consumer Watch: General Mills

Earnings season didn’t leave consumer staples unscathed.

General Mills (GIS | –0.77%) reported nearly 7% lower sales last quarter as cautious shoppers pulled back, though cost discipline helped lift profits. CEO Jeff Harmening summed it up bluntly: consumers are still feeling the squeeze.

My Take

Markets wanted a fairy-tale “soft landing” narrative from Powell, but what they got was a reminder that the Fed’s balancing act is more like walking a tightrope in the wind.

For investors, that means embracing volatility as the new normal. Personally, I see this as a market ripe for selective stock picking, robotaxis and streaming giants may still offer opportunity, but chasing every IPO? That’s a harder sell.

---

Kristoff - ChartMill

Next to read: Market Breadth Holds Steady in Cautious Territory