Overview

• The Federal Reserve announced a third rate cut of 2024, reducing rates by 0.25%, but signaled only two rate cuts for 2025, fewer than previously anticipated.
• Major U.S. stock indexes experienced sharp declines following the Fed's announcement, with the Dow dropping 1,100 points and the S&P 500 seeing record post-Fed decision losses.
• Investors are closely monitoring the release of November's Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation measure, expected to show annual inflation above its 2% target.
• Biotech stocks faced significant pressure due to their sensitivity to interest rates, with key indexes like XBI and SPBIOS falling over 4%, raising concerns about funding challenges for startups in the sector.
• Mexico's central bank cut interest rates for the fourth consecutive meeting, citing slowing inflation, while analysts warn of risks tied to U.S. economic policy under the incoming Trump administration.