Forefront Market Notes: September 23rd

Stocks moved higher last week after the Federal Reserve’s half-point rate cut, bolstered by multiple data points supporting a cooling but still strong economy and decelerating inflation.

­

The Standard & Poor’s 500 Index gained 1.36 percent, while the Nasdaq Composite rose 1.49 percent. The Dow Jones Industrial Average moved ahead by 1.62 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, inched up 0.42 percent.^1,2

­

Fed Cuts Rate 0.5 Percent

Stocks traded in a narrow range for the first half of the week as anxious investors awaited the outcome of the Federal Open Market Committee’s (FOMC) September meeting.^3,4

Shortly after 2 pm ET Wednesday, the Fed announced it was cutting rates by a half percentage point—a more significant cut than some investors anticipated. Stocks initially rose in response and then fell. Some market watchers attributed the decline to concern that the Fed might be concerned about economic growth.^5,6

But after sleeping on it, stocks rallied Thursday, with the Nasdaq, S&P, and Dow climbing 2.5 percent, 1.7 percent, and 1.3 percent, respectively. The Dow topped 42,000 for the first time, while the S&P crossed the 5,700 mark.^7,8

­

 

^{.Source: YCharts.com, September 21, 2024. Weekly performance is measured from Monday, September 16, to Friday, September 20. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points.}

­

Fed’s Move

The half-point cut was the first change in the Fed Funds Rate in 14 months and the first reduction in 4½ years, bringing its target range to 4.75-5.0 percent. Fed Chair Powell said the decision reflected the Committee’s “greater confidence that inflation is moving sustainably toward 2 percent” and that the “risks to achieving its employment and inflation goals are roughly in balance.”⁹

­

Tax Treatment of Hobbies

 

Taxpayers who earn money from their hobbies might have to report the income to the Internal Revenue Service (IRS). Here are some tips to help: 

*This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov¹⁰

­

Footnotes and Sources

^{1. The Wall Street Journal, September 20, 2024}

^{2. Investing.com, September 20, 2024}

^{3. CNBC.com, September 16, 2024}

^{4. The Wall Street Journal, September 18, 2024}

^{5. CNBC.com, September 18, 2024}

^{6. The Wall Street Journal, September 18, 2024}

^{7. The Wall Street Journal, September 19, 2024}

^{8. The Wall Street Journal, September 20, 2024}

^{9. The Wall Street Journal, September 18, 2024}

^{10. IRS.gov, May 8. 2024}

­

Stock market calendar this week: