Morning in New York: Fed's stance to be tested by statistics

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The Fed's rate decision, which was expected by the majority of the investment community, has been made, and the focus of attention is shifting to macro statistics, which will determine the dynamics of market quotations in the near future. On September 18, one of the important indicators of the state of the economy will be the weekly data of the labor market. It attracts increased interest due to concerns after the unexpected jump in the number of initial jobless claims to 263 thousand a week earlier. This time Freedom Broker focuses on the figure of 245 thousand.

The FRB Philadelphia will report its business activity index for September (consensus: 1.5 points, August: -0.3 points). Improving business sentiment in the manufacturing sector, coupled with a resilient labor market, will signal that the economy will remain stable at current rate levels. The resumption of monetary easing is positive for equity dynamics, although the risks of accelerating inflation will obviously make the regulator cautious about further actions.

Darden Restaurants (DRI) will report quarterly results before the open, and FedEx (FDX) and Lennar (LEN) will report after the end of the main session.

US index futures are showing positive dynamics, playing off the updated economic forecasts from the Fed. We assess the balance of risks as positive with moderate volatility. We focus on S&P 500 fluctuations in the range of 6600-6670 points (from 0% to +1% of the previous session's closing level).

- Shares of Nucor (NUE) are losing more than 4% on the premarket after the company released preliminary third-quarter guidance that was significantly more conservative than average expectations. The company forecast EPS in the range of $2.05-2.15 on April-June results of $2.6. Management attributed the revised guidance to the upcoming decline in production volumes and deteriorating margins in the key steel segment.

- Cracker Barrel (CBRL) stock is down more than 9% after the close of the main session on September 17. The restaurant chain reported $0.74 EPS for the quarter, compared to the consensus of $0.76. At the same time, investors were disappointed by the weak outlook for the new fiscal year. The company is targeting revenue in the range of $3.35-3.45 billion with a consensus of $3.52 billion, expecting a 4-7% decline in traffic.

- IonQ (IONQ) shares are adding about 5% ahead of the open amid news that it has signed a memorandum of understanding with the U.S. Department of Energy to advance quantum technologies in the space industry.

- Super Group (SGHC) shares were boosted by an increase in guidance for fiscal 2025 following strong preliminary third-quarter results. The company expects revenue in the range of $2.125-2.2 billion and adjusted EBITDA in the range of $550-560 million from the previous guidance of $2.04 billion and $470-480 million, respectively. Management attributed the improved outlook to robust demand for sports betting and optimized pricing in key international markets.

September 17 trading on the U.S. stock exchanges ended mixed. S&P 500 fell by 0.1%, Nasdaq 100 lost 0.21%, while Dow Jones rose by 0.57%, Russell 2000 added 0.18%. The session was influenced by the outcome of the Federal Reserve meeting, causing an overflow of funds into the small-cap segment. Shares of Nvidia (NVDA) were under strong pressure from the news from China. The financial sector (XLF: +0.97%) was the leader of growth, while industrial companies (XLI: -0.45%) were the outsiders.

The main event of the day was the Fed's decision to lower the key rate by 25 bps, to a range of 4-4.25%. The benchmark rate was lowered, which confirms our expectations, indicating the possibility of two more similar steps by the regulator before the end of the year. The FOMC's 2026 forecast calls for only one rate cut, while the futures market is pricing in three. The press release following the Fed meeting notes the shift of risks to the labor market. At the final press conference, the head of the regulator Jerome Powell emphasized the presence of "two-sided risks" to both the labor market and accelerating inflation. It also emerged that there was no broad support in the committee for a more immediate 50bp rate hike, and even consistent doves Christopher Waller and Michelle Bowman voted with the majority this time around. The general context of Powell's speech suggests that the Fed is acting optimally and is ready to react quickly to the changing situation in the economy. Concerns about possible acceleration of inflation remain a serious deterrent for the regulator.

- Activist investor Elliott Management acquired a stake in Workday (WDAY: +7.3%) for more than $2 billion and backed current management. This caused the enterprise software developer's stock to rise. Additional support for its quotations came from the announcement of a $4 billion increase in its buyback program.

- News of a partnership with Waymo to launch an unmanned cab service in Nashville in 2026 caused Lyft 's stock price to soar (LYFT: +13.1%) and put pressure on the securities of its competitor Uber (UBER: -5%).

- Paramount Group (PGRE: -11.4%) shares collapsed after Rithm Capital confirmed its purchase of the company at $6.6 per share, which was 10.7% below the previous day's closing levels.

- The departure of electronic components distributor Arrow Electronics (ARW: -6.2%) CEO Sean Kerins, for which no reason was reported, triggered a selloff in the stock.

- The Financial Times reports that Chinese regulators have banned the country's largest tech companies, including ByteDance and Alibaba (BABA), from buying AI chips from Nvidia (NVDA: -2.7%).

This article was AI-translated and verified by a human editor