During the December 2024 Federal Open Market Committee meeting, Jerome Powell, chairman of the U.S. Federal Reserve, highlighted concerns about persistent inflation exceeding the 2% target and the potential economic implications of President-elect Donald Trump’s policies. The minutes revealed that officials would adopt a more cautious approach regarding interest rate cuts. Despite these inflation worries, U.S. stocks saw modest gains, with the S&P 500 up 0.16% and the Dow Jones Industrial Average rising 0.25%, although the Nasdaq Composite slipped slightly. The 10-year Treasury yield reached its highest level since April at 4.730%.
In other market news, Nvidia’s CEO projected a long timeline for useful quantum computers, negatively impacting related stocks, while Rolls-Royce announced a significant investment to cater to the demands of wealthy clients. Meanwhile, the Russell 2000 index fell 0.48%, nearing correction territory. Analysts noted that inflation risks could affect market conditions, but some Fed officials like Governor Christopher Waller suggested the inflationary pressures might be easing, hinting at potential rate cuts in 2025. Investors are now looking ahead to the upcoming U.S. jobs report for further market direction.
