The stock market is having a hard time choosing a side after the Fed cut rates
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Wait is over: The Federal Reserve on Wednesday afternoon cut its benchmark overnight lending rate by a quarter percentage point, bringing its target range to 4% to 4.25%. Of the 12 voting members of the Fed’s policymaking arm, there was only one dissenter: newly appointed Fed Governor Stephen Miran, who also serves as chair of the Council of Economic Advisers in the White House. A close ally of President Donald Trump, who has been pushing the Fed to aggressively cut rates, Miran favored a half-point reduction. While the Fed’s move was widely expected, investors have been eager to get the official decision and then hear from Fed Chairman Jerome Powell. The meeting comes as the central bank is in a bit of a bind, given the recent uptick in inflation that has coincided with a weakening of the job market. In the statement alongside the announcement, the Fed said: “The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment have risen.” Speaking at his post-meeting news conference, Powell described Wednesday’s reduction as “a risk management cut.” Markets: The S & P 500 has been bouncing around on Wednesday afternoon, as traders and investors try to make sense of the Fed’s decision and economic projections (more on those shortly), and take into account Powell’s commentary. As of around 3:15 p.m. ET, the S & P 500 was trading modestly lower, down about 0.2%. That’s well off the lows of the session that we reached as Powell’s press conference got underway. The index had popped into slightly positive territory once we got the Fed’s decision before retreating. The Dow Jones Industrial Average was hanging onto its gains, but like the S & P 500, it also has given up some of its post-decision pop. The moves in the bond market are notable. As of this writing, the yield on the benchmark 10-year Treasury note is rallying to the highs of the day. It had initially moved to the lows on the back of the Fed’s release. In turn, we’re seeing a sell-off in Club holding Home Depot, which needs lower long-term rates to translate into lower mortgage rates to drive housing activity. Dot plot: We also got an update to the Fed’s quarterly Summary of Economic Projections, which contains its “dot plot” of interest rate projections and forecasts for inflation, unemployment and economic growth. The biggest takeaway here is that nine Fed members believe two more cuts are likely warranted by year-end, which suggests we could get a quarter-point cut at both the Fed’s October and December meetings. There is one outlier in the group who believes five more cuts are needed by year-end — and while these projections are given anonymously, people think that is likely Miran. (While Trump does not participate in FOMC decisions, he said earlier in the summer that he preferred rates between 2.25% and 2.5%. That’s why we placed a Trump dot on the plot.) The Fed’s median projection for 2026 is only one rate cut , though, which is more conservative than expected. On the labor market front, the median forecast is for the unemployment rate to be 4.5% at year-end, unchanged from the June projection. It stood at 4.3% in the August jobs report. All of that said, we would note that we don’t like to read too much into the dot plot, given the Fed has repeatedly said it is going to be data-dependent and not on a preset plan. That’s even more important to be mindful of, given how uncertain things are considering ongoing trade negotiations and labor market dynamics. IPO flow: It’s another busy week of initial public offerings with four companies expected to go public in deals sized at $250 million or more. Both StubHub and WaterBridge Infrastructure began trading on the New York Stock Exchange on Wednesday. Goldman Sachs and JPMorgan acted as lead joint book-running managers for the offering for StubHub. (JPMorgan and Barclays were the leads on WaterBridge.) Two more companies, Netskope and Pattern Group, are expected to go public later this week. Goldman is the lead underwriter of the Pattern deal. Meanwhile, Reuters on Wednesday reported that fitness app Strava has invited banks, including Goldman to pitch the company on being involved in a potential IPO as early as next year. Up next: Two restaurant stocks are set to report soon. Cracker Barrel is due out after the closing bell on Wednesday, while Olive Garden parent Darden Restaurants is on tap before the opening bell on Thursday. We will be looking for any readthroughs to portfolio name Texas Roadhouse . Another event we’ll be listening closely to is DuPont’s Investor Day, which kicks off at 9 a.m. ET. This is where the company will provide more details about the future DuPont company after the upcoming spin-off of Qnity Electronics. We will hear more about Qnity at a separate Investor Day starting at 2 p.m. ET. On the data side, on Thursday, we will see weekly initial jobless claims and continuing claims. Don’t forget, we also have our September Monthly Meeting for Club members, livestreamed starting at noon ET . (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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