CNBC Daily Open: A Fed rate cut might not be festive enough
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Taken from CNBC’s Daily Open, our international markets newsletter — Subscribe today On Wednesday stateside, the U.S. Federal Reserve is widely expected to lower its benchmark interest rates by a quarter percentage point to a range of 3.5%-3.75%.However, given that traders are all but certain that the cut will happen — an 87.6% chance, to be exact, according to the CME FedWatch tool — the news is likely already priced into stocks by the market. That means any whiff of restraint could weigh on equities. In fact, the talk in the markets is that the Fed might deliver a "hawkish cut": lower rates while suggesting it could be a while before it cuts again.The "dot plot," or a projection of where Fed officials think interest rates will end up over the next few years, will be the clearest signal of any hawkishness. Investors will also parse Chair Jerome Powell's press conference and central bankers' estimates for U.S. economic growth and inflation to gauge the Fed's future rate path.In other words, the Fed could rein in market sentiment even if it cuts rates. Perhaps end-of-year festivities might be muted this year.U.S. stocks were mixed Tuesday. The S&P 500 remained largely unchanged and the Dow Jones Industrial Average dropped 0.38%, but the Nasdaq Composite added 0.13%. The Russell 2000 hit an intraday high. Asia-Pacific markets mostly fell Wednesday.India's AI space attracts billions from Big Tech. Microsoft on Tuesday said it would invest $17.5 billion in India's cloud and artificial intelligence sector across four years, while Amazon on Wednesday pledged to invest over $35 billion by 2030 in the same area.China's consumer prices clock quickest rise in nearly two years. The country's consumer inflation for November climbed 0.7% from a year earlier, as expected by a Reuters poll. However, the producer price index dropped 2.2% on an annual basis, steeper than the estimated 2% fall.Indonesia-U.S. trade deal is on rocky ground. Jakarta is reluctant to agree to some conditions in the deal, The Financial Times reported Tuesday. U.S. trade representative Jamieson Greer believes Indonesia is "backtracking" on its commitments, people familiar with the matter told FT.[PRO] Will China sales lift Nvidia stock? While market reaction to news that U.S.
President Donald Trump has allowed the chipmaker to sell more advanced chips to Beijing was muted, analysts are more optimistic about the development.U.S.-China AI talent race heats upWhen it comes to brain power, "America's edge is deteriorating dangerously," Chris Miller, author of the book "Chip War: The Fight for the World's Most Critical Technology," told a U.S.
Senate Foreign Relations subcommittee last week. It's a lead that's "fragile and much smaller" than its advantage in AI chips, he said.Part of the difference comes from the sheer scale, especially as education levels rise in China. Its population is four times that of the U.S., and the same goes for the volume of science, technology, engineering and mathematics graduates. In 2020, China produced 3.57 million STEM graduates, the most of any country, and far outpacing the 820,000 in the U.S.— Evelyn ChengGot a confidential news tip? We want to hear from you.Sign up for free newsletters and get more CNBC delivered to your inboxGet this delivered to your inbox, and more info about our products and services.© 2025 Versant Media, LLC.
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