The mainstream media highlighted that the Dow Jones (DJI) gained nearly 500 points after the Fed announced a 25-bps cut in interest rates.
Stocks with a higher share price have a greater weighting in the index. Since those firms cause more point changes, watch UnitedHealth (UNH), Salesforce (CRM), and Goldman Sachs (GS) closely.
The Fed said that its objectives of achieving full employment and stable inflation are balanced. It is not likely to continue interest rate cuts. Despite the rate pause, the Dow Jones rose. Markets likely reacted to the Fed’s forecast for higher economic growth in 2026.
GS stock closed at a new high on Wednesday at $889.24. Banks benefit from a hot economy. Banks like JPMorgan Chase (JPM) added 3.19%, while Wells Fargo (WFC) added 2.02% to close at $90.69.
Importantly, the central bank planned to buy $40 billion of treasury bills monthly. This seems like a form of quantitative easing. It would offset the drop in demand for U.S. debt as investors buy elsewhere. For example, Canada (EWC) held its interest rate. That increases the attractiveness of holding the Canadian Dollar (FXC). Later this month, the Bank of Japan (EWJ) might raise interest rates by 25 bps. That should give Japanese companies a boost.
Investors may hold iShares MSCI Japan ETF (EWJ) to gain exposure in the Asian region.
