The last few trading days have been characterized by the highly anticipated Fed interest rate decision. The first US interest rate cut in around nine months should give investors on both sides of the Atlantic hope that the monetary policy headwinds will continue to ease.
NVIDIA's (ISIN: US67066G1040) investment in rival Intel (ISIN: US4581401001) also caused a stir this week.
DAX
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ZEW index significantly better than expected - US retail sales surprise
Even though the week that has almost come to an end was dominated by the FOMC meeting, the publication of various economic data provided a number of important stimuli.
At 37.3 points, the ZEW index for the Federal Republic of Germany on Tuesday was significantly better than expected (26.3 points), following 34.7 points in the previous month.
US retail sales also rose more strongly than expected (0.2%) with an increase of 0.6% (compared to the previous month). In the previous month, however, the increase had also amounted to 0.6%.
US Federal Reserve cuts key interest rate by 25 basis points almost unanimously
As expected, the US Federal Reserve (Fed) tightened the interest rate screws on Wednesday evening and lowered the key interest rate by 25 basis points.
The Fed's Monetary Policy Council voted almost unanimously in favor of the move. Only one central banker had spoken out in favor of a rate cut of 50 basis points. This puts the interest rate band at 4.00 to 4.25 percent.
The Fed is therefore likely to attempt to counter the increased labor market risks. However, rising inflation is likely to pose a challenge.
The Fed is scheduled to meet for the next time on October 29 to decide on the future key interest rate level. The CME Group's "Fed Watch Tool" estimated the chance of a further interest rate cut of 25 basis points at 85.5 percent on Thursday evening.
The weekly initial claims for US unemployment benefits came in at 231,000 in the afternoon, slightly weaker than expected (240,000) after 263,000 claims previously. Investors are likely to continue to keep a close eye on the development of the US labor market.
NVIDIA joins Intel - stock shoots up by approx. 28 percent
The announcement of NVIDIA's acquisition of a stake in rival Intel also provided plenty to talk about on the markets. According to media reports, the world's largest manufacturer of semiconductors wants to invest five billion dollars. On Thursday, Intel shares climbed by around 28 percent on Wall Street. "We will expand our ecosystems and lay the foundation for the next era of computing," said NVIDIA CEO Jensen Huang.
Intel
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NVIDIA
Source: TradingView
Dow Jones Industrial Average Index
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