Happy Thursday and welcome to your morning wrap of the key business and political headlines from around the world.
First up, the Federal Reserve has cut its key interest rate by 25 basis points and projected it will reduce rates twice more this year amid growing concerns about the health of the US labour market, Reuters reported.
The move takes the federal funds rate to a new range of 4% to 4.25%.
It is the first time the Federal Open Market Committee (FOMC) has lowered rates since December, as the bank has previously opted to pause potential rate cuts to assess the impact of President Donald Trump’s trade tariffs.
Today’s decision suggests the bank, which has a dual mandate, is less concerned about inflation and instead worried about weakening growth and rising unemployment.
Fed chair Jerome Powell told a press conference that some of the more dire inflation scenarios facing the country have faded.
"Really, since April, to me, the risks of higher and more persistent inflation have probably become a little less, and that's partly because the labour market has softened, GDP growth has slowed," he said.
The Federal Reserve building.
The FOMC was nearly unanimous in its decision, with new Governor Stephen Miran, who joined the Fed on Tuesday and is on leave, dissenting in favour of a 50 basis point cut.
Annex Wealth Management chief economist Brian Jacobsen, in a note, said the decision was largely as expected.
"Broad economic growth is stronger than expected, inflation is a bit tamer than feared, and the labour market is decelerating faster than hoped. All in, it’s not a sign that they’re in panic mode, nor should they be. Miran’s dots stand out like a sore thumb, so those are going to be perceived more as signalling than any sort of indicator of where policy might actually head."
Powell was also asked how he could reassure markets that the Fed’s decisions were informed by the economic outlook rather than political considerations.
"It's deeply in our culture to do our work based on the incoming data and never consider anything else. That's just everybody who's at the Fed really feels strongly about that way," he said.
Financial markets initially spiked on the decision, before trimming their gains.
The Dow Jones Industrial Average ended 0.7% higher, the S&P 500 was up 0.1%, while the tech-heavy Nasdaq was flat.
CNBC said that traders were possibly disappointed by a more hawkish outlook for rates in 2026, where officials are only predicting one more cut in the new year, which is slower than the current market pricing for three.
There was a mixed response on Wall Street to the decision.
Moving to the Middle East, Israeli troops and tanks have pushed deeper into Gaza City, as more people flee the area and air strikes cut off phone and internet services, Associated Press reports.
Meanwhile, the Palestinian death toll in the conflict has surpassed 65,000, according to the local health agency, which is part of the Hamas-run government. The October 7 attack by Hamas on Israel, which pre-empted the conflict, killed 1195 people.
The Israeli military said air force and artillery units had struck the city more than 150 times in the last few days ahead of ground troops moving in. Palestinians streamed out of the city, some by car, and others by foot. Gaza City is thought to have a population of 1 million.
To the United Kingdom now, where the Royal Family has hosted US President Donald Trump at Windsor Castle on the first day of his state visit, the BBC reported.
The President and First Lady have taken part in several ceremonies, including a carriage procession, a Red Arrows flypast, and a visit to the late Queen’s tomb.
A state banquet will be held this evening, where both the President and the King will give speeches.
Meanwhile, a large anti-Trump protest is underway in central London, organised by the Stop Trump UK coalition group – a group of more than 50 organisations, including climate, anti-racism and pro-Palestinian activists.
In business news, the Financial Times has reported that the Cyberspace Administration of China has ordered companies, including TikTok’s parent company ByteDance and Alibaba, not to buy Nvidia’s chip that was made for the country.
Nvidia chief executive Jensen Huang, in response to a question about the report, said the company could only service a market if it was wanted, CNBC reported.
“We probably contributed more to the China market than most countries have. And I’m disappointed with what I see,” Huang said. “But they have larger agendas to work out between China and the United States, and I’m understanding of that.”
Huang has guided financial analysts not to include China in their forecasts because of geopolitical tensions. The US previously banned the sale of Nvidia’s artificial intelligence chips to China over national security concerns, but a deal was struck in August under which the chip maker would receive export licences in exchange for 15% of Chinese sales going to the US.
Jensen Huang.
In European markets, shares in German sportswear company Puma have jumped 11% after local reports that two investors are preparing a takeover bid for the company, Reuters reported.
Authentic Brands, which owns the likes of Quiksilver, Reebok and Champion, and private equity firm CVC have both expressed their interest in the 29% stake held by the Pinault family.
A person close to the French family’s holding company said there was no active sales process for its Puma stake despite the interest.
Finally, shares in online ticket seller StubHub fell more than 5% in their New York Stock Exchange debut overnight, after the company priced its IPO in the middle of its expected range, CNBC reported.
The pricing at $23.50 raised $800m for the company, but it opened at $25.35 and dropped as low as $22.
StubHub primarily generates revenue from connecting buyers with ticket resellers. More than 40 million tickets were sold on StubHub’s marketplace last year by roughly one million sellers, the company said in August.
It has benefitted from a resurgence in the live events market in recent years following Covid lockdowns.
