Global Markets Rally as Federal Reserve Cuts Interest Rates

North American Morning Briefing : Stock Futures, Global Markets Rally After Fed Cut

Stock futures rose sharply on Thursday after the Federal Reserve reduced interest rates by a half point. Jerome Powell had damped the mood a little by saying deeper cuts going forward weren't a given. Regardless, Nordea said the Fed has shown it will do what is necessary to keep the economy growing steadily. That could limit any negative reaction to bad data, particularly on jobs, which have been volatile and a source of market jitters. Later, the Bank of England's rate decision is due. It is expected to hold rates at 5%, having cut in August for the first time in four years. In recent trading: Global stocks rose. The Nikkei 225 ended 2.1% higher, helped by a weaker yen. Hong Kong's Hang Seng Index and Europe's Stoxx 600 also rose. Treasury yields rose slightly. The 10-year yield settled Wednesday at 3.685%. The WSJ Dollar Index extended declines. Sterling strengthened against the dollar to the highest intraday level since March 2022. ADRs of JD.com and Alibaba jumped premarket after their shares rose in Hong Kong. ADRs of Temu-owner PDD rose almost 3%. Enphase Energy rose 4% and First Solar rose 4.2% after the Fed cut interest rates. Solar companies are seen as beneficiaries of lower borrowing costs. FedEx was rising 1.3% ahead of the release of fiscal first-quarter earnings. Hertz Global Holdings was down 3.8% to $3.56 after Barclays initiated coverage of the company at Underweight with a price target of $3. Avis Budget Group was initiated with an Equal Weight recommendation at Barclays. Steelcase's second-quarter revenue and its third-quarter revenue outlook missed analyst expectations. Shares were falling 9%. Postmarket Movers America's Car-Mart plans to sell $65 million of stock in an underwritten public offering. Shares declined 13%. Exicure was granted a Nasdaq listing extension, subject to showing compliance with all applicable listing criteria by Nov. 14. Share rose 168%. Progyny said a "significant" client, which accounted for approximately 670,000 of the company's members and 12% of its revenue in the first half of the year, will terminate its services agreement, effective Jan. 1. Shares fell 25%. Watch For: Existing Home Sales for August; Weekly Jobless Claims; Earnings from FedEx, Lennar, Darden Restaurants, FactSet Research Systems, Cracker Barrel Old Country Store Today's Headlines/Must Reads: - Big Rate Cut Forces Fed to Contend With New Obstacles - The Fed Has Significantly Improved the Odds of a Soft Landing - The Clean Jet Fuel Technology Winning Over Wall Street The dollar rose after briefly falling to a near 14-month low on Wednesday in reaction to the Fed cut. The dollar's recovery is "probably because the move did not come out of the blue after recent adjustments in market rate-cut expectations and because Powell made it clear that the 50 basis-point easing did not represent the new pace," Unicredit Research said. MUFG Bank said the dollar's recovery is unlikely to last as the currency remains vulnerable to the U.S. rates curve pricing in more cuts. "The 'buy the rumour, sell the fact' philosophy may see some further dollar buying near-term but we would be surprised if there was much momentum to that trade," MUFG said. The Fed will likely cut rates faster than its projections suggest and faster than the forward overnight index swaps curve, it added. Sterling rose ahead of the Bank of England's policy decision later as the central bank is widely expected to leave interest rates unchanged. Inflation hasn't eased enough to warrant further rate cuts just yet, ING said. The notion that the BOE is treading more carefully than the Fed is contributing to sterling's strength, it said. "That shouldn't change after today's meeting." GBP/USD could rise above 1.33 by the end of the week while EUR/GBP could fall below 0.84, ING said. Bonds: Historically, bonds of intermediate maturity--or medium-term bonds--have tended to outperform cash during the Fed's interest-rate cutting cycles, Pimco said. "With the Fed starting with a bang, investors may benefit from locking in still-attractive intermediate yields." Bonds also offer hedging properties in the event that a harder landing prompts the Fed to cut rates more quickly, Pimco added. Energy: Oil prices edged higher after a large interest-rate cut from the Fed, but market concerns over the global demand outlook lingered. Meanwhile, traders were keeping a close eye on the Middle East after Iran-backed Hezbollah was hit by another wave of exploding devices that pointed to a complex attack carried out by Israel. Both Brent and WTI recently rebounded from multi-year lows, but widespread concerns over weakening demand appeared to be capping further gains. Metals: Gold prices nudged higher after the Fed kicked off its monetary easing cycle. "The FOMC reassured investors that it's ready and willing to pull the trigger on bigger rate adjustments if needed, but Powell's cautious message moderated some of that optimism," Peak Trading Research said. TODAY'S TOP HEADLINES Meta to European Union: Your Tech Rules Threaten to Squelch the AI Boom BRUSSELS-A group of companies including Meta Platforms, Spotify and Italian luxury-fashion giant Prada warned Thursday that the European Union risks missing out on the full benefits of artificial intelligence because of the bloc's tech regulations. In an open letter that was coordinated by Meta, executives from more than two dozen companies said AI can boost productivity and expand the economy, but Europe might reap fewer rewards than other jurisdictions. Adobe Stock Is an Unappreciated AI Play. It's Time to Buy. Adobe's earnings report painted a pretty picture of its ability to turn artificial intelligence into paying customers. But the reaction to its disappointing guidance was anything but pretty. That has created a buying opportunity in its stock. There was a lot to like about Adobe's third-quarter results, with both earnings and sales easily topping estimates. The market, though, focused on management's somewhat disappointing outlook, which included a forecast for "net new annual recurring revenue"-representing the sales Adobe expects to bring in from new customers or from increasing monthly subscription payments-to come in at $550 million in the fourth quarter, up 9% quarter over quarter. The fourth quarter usually sees double-digit growth, and the stock tumbled 13% after the report. It has since settled around $510. Lower Interest Rates Yield a Loser: Berkshire Hathaway Berkshire Hathaway was a major beneficiary of the sharp increase in short rates from 2022 through early this year but now stands to lose given the drop in short rates now unfolding with the Federal Reserve's half-point cut in a key short rate Wednesday. Berkshire had the largest holdings of cash and equivalents of any U.S. company at $277 billion at the end of the June, compared with Apple at $153 billion and Alphabet at $101 billion. Boeing Furloughs White-Collar Workers as Strike Worsens Cash Crunch Boeing is furloughing tens of thousands of white-collar employees in an effort to cut costs and avoid a credit-rating cut in the midst of a strike by its largest union. The jet maker will furlough affected employees for one week out of every four weeks for the duration of the walkout, Chief Executive Kelly Ortberg wrote in a memo to employees Wednesday. New Car Registrations Slump in Europe Amid Weakening Demand, Steep EV Decline Stellantis and Volkswagen posted significant drops in August new-car registrations in the European Union, contributing to a sharp overall decline as demand weakened in key markets and electric-vehicle sales fell. Consumers in core markets of Germany, France, Italy and Spain drove an 18% on-year drop in the bloc's monthly registrations, which reflect sales, the European Automobile Manufacturers' Association said Thursday. EU registrations came to around 643,600 for the month, with every major European carmaker posting declines. Pentagon Worries Israel Is Close to Launching Ground War in Lebanon A wave of deadly explosions of pagers and other electronic devices carried by militants in Lebanon has sharply heightened Pentagon concern about a potential ground war erupting in southern Lebanon between Israel and Hezbollah. Even before the hundreds of widely dispersed detonations Tuesday and Wednesday, U.S. Defense Secretary Lloyd Austin told other senior Pentagon officials in a Monday meeting that he feared Israel could soon launch an offensive, after months of back-and-forth rocket and air attacks with Hezbollah, an Iranian-backed militia group that controls much of southern Lebanon. Republican Divisions Sink House Bill as Government Shutdown Nears WASHINGTON-An initial proposal by House Speaker Mike Johnson (R., La.) to fund the government was voted down Wednesday, underscoring the divisions within the Republican Party but potentially setting the stage for talks with Democrats on avoiding a partial shutdown at the end of the month. The vote on the short-term funding bill was 202 in favor to 220 against, with more than a dozen holdout Republicans joining most Democrats in opposition. Two Republicans voted present. Putin Is Under Pressure to Call Up More Troops for War of Attrition Months before President Vladimir Putin's inauguration in May, he met with Defense Ministry officials who pushed for a fresh round of mobilization to recruit more troops to offset Russia's losses on the front line in Ukraine, said a person briefed on the exchange. Putin dismissed the idea, saying he wanted to use only those who were voluntarily signing military contracts, the person said.

EMEA Morning Briefing : Investors Buckle Up for Imminent Fed Rate Cut

CPI data for EU, U.K.; PPI data for U.K.; No major corporate events expected Opening Call: European stock futures were lower ahead of the Federal Reserve's rate cut decision. Asian stock benchmarks were broadly higher; the dollar weakened and Treasury yields were mixed; oil futures declined while gold gained. Equities: Stock futures in Europe declined early Wednesday as investors wait to see whether the Fed cuts interest rates by a quarter-point or a half-point. U.S. stocks have rallied to trade around record highs ahead of the Fed meeting, with some investors giddy at the prospect of lower rates and a still-growing economy. All eyes will be on Fed Chair Jerome Powell's commentary on the economy during his news conference. "The key risk will be convincing market participants that they are not behind the curve, but rather balancing risks appropriately," said Josh Hirt, U.S. senior economist at Vanguard Group. "Importantly, this rate cut is just the beginning," said Greg McBride, chief financial analyst at Bankrate. "By itself, one rate cut isn't a panacea for borrowers grappling with high financing costs and has a minimal impact on the overall household budget. What will be more significant is the cumulative effect of a series of interest rate cuts over time." Also on tap today are eurozone and U.K. inflation figures ahead of the Bank of England rate decision on Thursday. Forex: U.S. dollar weakened ahead of the FOMC decision due out later today. Market expectations for a 50 bps rate cut by the Fed have stabilized around a 60%-70% range, Maybank analysts said. However, the FOMC would likely want to avoid sending a wrong signal to markets with a large rate cut, partly because this could cause panic, the analysts said. Bonds: Treasury yields were mixed ahead of the Fed rate decision. "Although current market pricing sees the Federal Reserve announcing a 50-basis-point rate cut this week, we think a 25-basis-point move is marginally more likely," said Neil Shearing, group chief economist at Capital Economics. "There is a case for the Fed beginning its easing cycle with a bigger move, but recent history shows how 50-basis-point cuts are often associated with far more challenging economic environments than today's, " Shearing said. Energy: Oil prices were lower in Asia. Prices got a lift Tuesday after pagers carried by Hezbollah operatives in Lebanon exploded around the same time in an apparent attack - raising fears of a broader Middle East conflict that could threaten crude flows from the region. Prices were fluctuating early Wednesday as traders assess supply and demand dynamics, said Li Xing Gan, financial markets strategist at Exness. On the supply side, oil disruptions could offer short-term relief from the recent fall in oil prices, the strategist said. However, sluggish demand could overshadow these supply worries as market participants are still cautious amid persistent weakness in China, the strategist added. Metals: Gold edged higher. Prices of the precious metal remain near record highs, aided by dollar weakness and growing expectations of a large rate cut by the Fed, said Joseph Dahrieh, managing principal at Tickmill. Recent U.S. labor market data indicating a slowdown has increased the probability of a 50 bps rate cut, Dahrieh said. Also, rising political uncertainty in the U.S. ahead of the November election was boosting gold's appeal as a safe-haven asset, Dahrieh added. -- Copper edged lower in Asian trade. Investors await the U.S. Fed rate cut decision as bets on a 50 bps cut rise. Markets were on the edge while also waiting for the Chinese government to respond to the weak economic data released recently, the ANZ Research team said. There's market speculation that Chinese officials could announce more economic support measures soon, they added. TODAY'S TOP HEADLINES Fed Prepares to Lower Rates, With Size of First Cut in Doubt The Federal Reserve is set to cut borrowing costs at its two-day meeting that ends Wednesday. The goal: preserve a solid job market now that price pressures have cooled. The decision over whether to cut the Fed's benchmark interest rate, currently at a two-decade high between 5.25% and 5.5%, by either a larger half percentage point or by a traditional quarter point will come down to how Chair Jerome Powell leads his colleagues through a finely balanced set of considerations. Gold is giving you a once-in-a-generation buying opportunity on its way to 4,400 Now that gold prices GC00 are reaching new highs, is there still a buying opportunity - or is this a bull trap? Let's begin with the reasons for caution. Conventional drivers of gold prices have lagged the yellow metal and are forming negative divergences that warn of excessive frothiness. Should investors be worried about these technical warnings of possible weakness? The Stock Market Is Priced for Middling Returns-No Matter What the Fed Does Half point or quarter? Soft landing or hard? Sticky inflation or a slowdown in jobs? These things might influence the stock market's next gyrations, but long-term retirement plunkers can safely ignore them in predicting what's to come. Returns over the next decade are likely to be modest, no matter the Federal Reserve's next steps, simply because investors have had it too good for too long. Hezbollah Pagers Explode in Apparent Attack Across Lebanon BEIRUT-Pagers carried by thousands of Hezbollah operatives exploded at about the same time Tuesday afternoon in what appeared to be an unprecedented attack that authorities said injured almost 2,800 and killed nine across Lebanon. Many of the affected pagers were from a new shipment that the group received in recent days, people familiar with the matter said. A Hezbollah official said many fighters had such devices, adding that some people felt the pagers heat up and disposed of them before they burst. UAW Clashes With Jeep Maker Stellantis, Threatening Strike The United Auto Workers is once again taking aim at the Jeep maker, Stellantis, after threatening to go on strike at the company's U.S. factories over delays in reopening an idled plant in Illinois and other points of contention. UAW President Shawn Fain, talking to members Tuesday evening, said the union was taking the next steps to prepare for a work stoppage, including a completion of the grievance process and having some UAW locals take strike-authorization votes. While those votes don't lead to immediate action, they indicate members' support for a walkout. Meta Bans Russia's RT From Facebook, Instagram for 'Foreign Interference' Facebook owner Meta Platforms is kicking Russian TV channel RT off its apps, depriving the Kremlin-backed media outlet of one of its biggest remaining distribution platforms in the West. The ban comes days after the U.S. government announced sanctions against the state-owned channel and its related entities, accusing them of carrying out covert influence operations aimed at interfering in foreign elections, including recent Moldovan elections. BlackRock, Microsoft Partner on Massive New AI Infrastructure Fund BlackRock, Microsoft and United Arab Emirates state-backed investor MGX are partnering on a new artificial-intelligence infrastructure fund that aims to raise $30 billion to invest in data centers and related power infrastructure. After raising the private-equity capital from investors, the partnership could deploy up to $100 billion in total capital when including debt financing, the parties said Tuesday. Most of the infrastructure investments will be made in the U.S. JPMorgan in Talks With Apple to Take Over Credit Card From Goldman JPMorgan Chase is talking with Apple about taking over the tech company's credit-card program. Discussions started earlier this year and have advanced in recent weeks, but a deal could still be months away, according to people familiar with the matter. It isn't guaranteed a deal will come together, because crucial details, including the price, are still to be negotiated. All times in GMT. Powered by Onclusive and Dow Jones. Write to us at newsletters@dowjones.com We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to https://newsplus.wsj.com/subscriptions. This article is a text version of a Wall Street Journal newsletter published earlier today.

EMEA Morning Briefing : Stock Futures Rise as Big Fed Cut Boosts Mood

BOE rate decision; trading updates from Next, Ocado Opening Call: European stock futures rose, tracking moves by U.S. equity futures and Asian stock benchmarks. The dollar and Treasury yields advanced; while oil and gold futures fell. Equities: Stock futures advanced early Thursday as markets reacted to the Federal Reserve's outsize rate cut amid efforts to chart a course for a soft landing. Later today, the Bank of England is expected to keep interest rates unchanged later today after getting ahead of the Fed at the beginning of August. Data Wednesday showed U.K. headline inflation remained stable close to the BOE's target in August, but services inflation accelerated to 5.6% from 5.2% in the previous month. BOE Governor Andrew Bailey has pursued a hawkish message since agreeing to cut the bank rate in August, advocating in Jackson Hole that policy setting will need to remain restrictive, which could prompt only one further cut before the end of the year, said Pierre Roke, associate at Validus Risk Management. - The start of the Fed's easing cycle should be seen as a significant signal for increasing exposure to shares, said Chris Galipeau, senior market strategist with the Franklin Templeton Institute. Since 1990, when the Fed is cutting rates, large cap growth and small cap growth have generated the strongest performance in the 12 months following the initial rate cut, he said. "As a result, we view any pullback as a buying opportunity," Galipeau added. Forex: Overnight action in foreign-exchange markets suggests the "downside momentum of the USD has run into fatigue," Maybank said. The rebound of the USD Index means that even with a 50bps Fed rate cut, "USD bearish momentum has run out of steam from the rates perspective and it is now up to global growth momentum outside of the U.S. to take the USD lower," Maybank added. Bonds: U.S. Treasury yields likely have potential scope to retrace higher in the near term, given that another 50 bps worth of Fed rate cuts are far from certain, TD Securities said. Markets' pricing for Fed rate cuts this year may also decline if U.S. labor market data continue to show relative stability, it added. TD Securities remains buyers of dips in yields and looks for the yield curve to keep steepening. Energy: Oil futures edged lower early Thursday. Demand concerns have outweighed supply risks from rising tensions in the Middle East, ANZ said. U.S. government data showed declining gasoline demand and jet fuel consumption. The possibility of a hard economic landing is also weighing on sentiment as reflected in speculative net long positions in Brent futures, which have turned bearish for the first time, ANZ added. Metals: Gold fell in Asia, falling back after front-month Comex gold for September delivery posted its third-highest close ever on Wednesday. However, the Fed's 50bp rate cut overnight serves as the beginning to a rate-cut cycle that markets have been waiting for a long time and could fuel appetite for assets like gold, said Bas Kooijman, CEO and asset manager of DHF Capital. The size of the rate cut also opens the way for more aggressive actions in coming months, Kooijman added. - China's property indicators continue to paint a bleak picture for bulk commodities, ANZ said. Falling sales and contracting new starts seem to suggest that the property crisis will continue and have little room for any significant recovery in steel demand, ANZ said. "Weak steel consumption and negative mill margins will keep iron ore demand subdued," the bank added. The Federal Reserve voted to lower interest rates by a half-percentage point, opting for a bolder start in making its first reduction since 2020. The long-anticipated pivot followed an all-out fight against inflation that the central bank launched two years ago. Eleven of 12 Fed voters backed the cut, which brings the benchmark federal-funds rate to a range between 4.75% and 5%. Quarterly projections released Wednesday showed a narrow majority of officials penciled in cuts that would lower rates by at least a quarter-point each at meetings in November and December. Big Rate Cut Forces Fed to Contend With New Obstacles Fed Chair Jerome Powell entered a new phase in his campaign to softly land the U.S. economy, lowering interest rates Wednesday with an audacious half-point cut. The move raised new questions the central bank can't easily answer. At the same time, the rate cut did clarify the answer to a more important question about the Fed's overarching goal. It underscored Powell's desire to prevent the central bank's past rate rises from tipping the economy into recession now that inflation is heading down. The Fed Has Significantly Improved the Odds of a Soft Landing In the past month, something that once seemed impossible suddenly became likely. After four years of upheaval, the U.S. now seems to have low inflation, low unemployment, and solid economic growth. The popular term for this is soft landing. A better word is "normal." This is what an economy is supposed to look like. U.S. Importers Are Pulling in Goods Early as Possible Port Strike Draws Closer U.S. importers are rushing in millions of dollars' worth of electronics, holiday goods and industrial materials to get ahead of a possible strike by dockworkers in less than two weeks that threatens to lock down major ports and hammer the American economy. The drive has gained urgency as a walkout by 45,000 dockworkers at ports from Maine to Texas has grown more likely, swamping West Coast ports with big cargo volumes as companies redraw their supply chains to get away from the looming labor turmoil. Bond market gets a Fed wake-up call after pricing in a recession The Federal Reserve moved in a big way on Wednesday to immediately lower borrowing costs for the first time in four years. The central bank's first interest-rate cut since 2020 slashed its short-term policy rate by half a percentage point, bringing it down to a target range of 4.75% to 5%. Why the Bank of England Won't Follow the Fed The Bank of England will likely keep interest rates unchanged this month, with bank officials making a decision within 24 hours of the Federal Reserve cutting interest rates. To be fair, at the beginning of August the BOE got ahead of the Fed by making its first cut since the Covid-19 pandemic. That was a tight vote, with a slim 5-4 majority of voters favoring a reduction. Wednesday's half-point Fed-rate reduction marked the first U.S. easing in years. Danske Bank to Pay $7 Million in French Settlement Over Estonia Money-Laundering Danske Bank has agreed to pay the equivalent of $7 million in a settlement with French authorities over its failure to stop money-laundering at its former branch in Estonia. The settlement: Danske Bank, the largest in Denmark, said Wednesday it had cooperated with French authorities and agreed to pay 6.33 million euros in a settlement with France's national financial prosecutor, ending that country's investigation into the bank. Boeing Furloughs White-Collar Workers as Strike Worsens Cash Crunch Boeing is furloughing tens of thousands of white-collar employees in an effort to cut costs and avoid a credit-rating cut amid a strike by its largest union. The jet maker will furlough affected employees for one week out of every four weeks for the duration of the walkout, Chief Executive Kelly Ortberg wrote in a memo to employees Wednesday. T-Mobile Strikes Deal With OpenAI T-Mobile US said it would partner with OpenAI to build an artificial-intelligence platform designed to help the telecom company gain and keep customers. The companies said the new platform, called IntentCX, will harvest data on customer interactions from the millions of T-Mobile subscribers who use its T-Life app. The app, launched this year, combines several existing services like bill management, smartwatch integration and T-Mobile Tuesdays retail deals through a single portal. 06:00/EU: Aug New Passenger Car Registrations in Europe statistics (EU27 + EFTA3) 08:00/NOR: Norges Bank monetary policy decision and publication of Monetary Policy Report All times in GMT. Powered by Onclusive and Dow Jones. Write to us at newsletters@dowjones.com We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to https://newsplus.wsj.com/subscriptions. This article is a text version of a Wall Street Journal newsletter published earlier today.

North American Morning Briefing : Investors Brace for Fed Day Moves

The big day is finally here and stock futures inched up as investors wait for an almost certain rate cut from the Federal Reserve--its first since 2020. What remains up in the air is how large it will be and that could cause quite a bit of market volitility. "[G]iven the uncertainty that's still looming, we can expect a decent market reaction whatever the decision is...You'd have to go back over 15 years to find such an uncertain situation this close to the decision," Deutsche Bank said. BlackRock teamed with Microsoft and MGX, the Abu Dhabi-backed investment company, on a new artificial-intelligence fund. BlackRock was up 0.1% and Microsoft gained 0.2%. Intuitive Machines won a NASA contract worth up to $4.82 billion. Shares rose 41% Tesla shares swing wildly around rate decisions from the Fed. Since 2019, Tesla stock has moved an average of about 2.5%, up or down, the day of the decision, according to Dow Jones Market Data. Postmarket Movers Cibus intends to offer shares of its Class A common stock in an underwritten public offering with net proceeds in part to fund further development of new seed traits. Shares fell 6.1%. 23andMe 's independent directors resigned, citing lack of an actionable proposal for non-affiliated shareholders as Chief Executive Anne Wojcicki seeks to take the company private. Shares fell 8%. Watch For: Housing Starts for August; EIA Weekly Petroleum Status Report; interest-rate decision; Federal Reserve economic projections Today's Headlines/Must Reads: - The Fed Isn't First to Cut Rates, but It Is the Signal Other Central Banks Want - Bank of Japan Expected to Stand Pat; All Eyes for Clues on Timing of Next Hike - Amazon's Return-to-Office Plans Spark Concern and Debate Among Employees "If the Fed delivers a 25 basis-point cut, as we expect, the dollar might broadly benefit from investors partially scaling back expectations of very aggressive easing in the U.S. over the coming quarters," Unicredit Research said. ING said the dollar could rise if the Fed cuts rates by 25bp, but the appreciation might not last. The dollar could struggle to hold onto gains beyond the very short-term as the Fed is likely to accompany a smaller rate cut with dovish messaging, it said. That could include a few members voting for a 50bp cut and Powell "opening the door to larger cuts ahead," it added. ING also said that If the Fed cuts by 50bp and markets read that as a panic move, dollar weakness may be channelled via the euro, yen and Swiss franc while risk-sensitive currencies like the Norwegian krone and Swedish krona might take a hit. However, if the Fed should cut rates by 25bp, it might send the euro below $1.10 initially but it should gradually recover in coming days. The euro could trade in a tight range against the dollar ahead of the Fed's meeting. "If the Fed cuts by 50bp and markets read that as a panic move, dollar weakness may be channelled via the euro, Japanese yen and Swiss franc while risk-sensitive currencies like the Norwegian krone and Swedish krona may take a hit," ING said. However, the Fed is likely to cut rates by 25bp, which could send the euro below $1.10 initially, but it might gradually recover in coming days, it added. Sterling rose after data showed U.K. core inflation accelerated by more than expected in August ahead of the BOE rate decision on Thursday. "This morning's numbers all but confirm that the Bank of England should keep rates on hold tomorrow," ING said. Bonds: The Treasury market is clamouring for the Fed to cut rates aggressively as the inversion between the Fed funds rate and the two-year yield is the widest it's been for 45 years, apart from 2007-08, Jupiter Strategic said. "There is a risk that if central banks don't act fast, they could turn a soft landing into a hard one." "Whether they do 50 or 25 seems to miss the point: the Fed should have cut rates back in July," it added. Energy: Oil prices edged lower on reports of a surprise build in crude inventories and broader concerns over global demand, but expectations of interest-rate cuts and heightened tensions in the Middle East were still providing some support. According to reports, citing figures from the Petroleum Institute, crude stocks rose by 1.96 million barrels the past week, suggesting cooling demand in the world's top consumer. However, prices are supported by prospects that lower rates will weaken the dollar and boost fuel demand, as well as fears of a full-scale war in the Middle East after Iran-backed Hezbollah accused Israel of orchestrating the deadly pager blasts in Lebanon. Metals: Gold prices were broadly stable, holding on to recent gains ahead of the Fed's decision, with a potential 50bp cut expected to further boost non-yielding assets. Angle One said gold might stay under pressure as markets remain cautious ahead of the FOMC decision. "The real risk is that market pricing is too dovish, and that the Fed won't deliver a dovish 50-bp cut considering that the U.S. Presidential elections are around the corner." This could see yields and the dollar rip higher and weigh further on gold, it said, and it projects support for spot prices at $2,540-$2,580 and resistance at $2,645-$2,688. TODAY'S TOP HEADLINES Google Wins Fight to Scrap $1.7 Billion EU Antitrust Fine Over Ads Alphabet's Google scored a big win Wednesday after the European Union's second-highest court canceled a fine of 1.49 billion euros, or $1.66 billion, that antitrust officials had imposed on the search giant over how it might have restricted the way that some websites displayed ads sold by its rivals. The European Commission, the EU's executive arm, levied the fine in 2019, saying Google had abused its dominance as a search engine and an advertising broker by imposing restrictive terms in contracts with third-party websites that effectively prevented Google's rivals from placing their own search adverts on those websites. Tupperware Files for Bankruptcy After Struggling With Weak Sales Tupperware Brands, the iconic food-storage company known for its resealable plastic containers and pioneering direct-to-consumer sales, has filed for bankruptcy after years of struggling with weak sales. Tupperware and certain subsidiaries have voluntarily initiated chapter 11 proceedings in the U.S. Bankruptcy Court in Delaware, the company said Tuesday. It will seek court approval to continue operating and to facilitate a sale process to protect its brand during the proceedings. UAW Clashes With Jeep Maker Stellantis, Threatening Strike The United Auto Workers is once again taking aim at the Jeep maker, Stellantis, after threatening to go on strike at the company's U.S. factories over delays in reopening an idled plant in Illinois and other points of contention. UAW President Shawn Fain, talking to members Tuesday evening, said the union was taking the next steps to prepare for a work stoppage, including a completion of the grievance process and having some UAW locals take strike-authorization votes. While those votes don't lead to immediate action, they indicate members' support for a walkout. U.K. Inflation Holds Steady Ahead of Bank of England Decision The U.K.'s annual rate of inflation was unchanged in August, despite prices of services increasing at a faster rate, reinforcing expectations that the Bank of England will leave its key interest rate unchanged Thursday. Consumer prices were 2.2% higher in August than the same month last year, a level of inflation that matched July's rate, the Office for National Statistics said Wednesday. Economists polled by The Wall Street Journal also expected inflation to remain at 2.2%. Trump Floats Easing Cap on State and Local Tax Deductions WASHINGTON-Republican presidential nominee Donald Trump suggested Tuesday that he wanted to reverse-not extend-a crucial piece of the tax law he signed in 2017. A day ahead of a rally planned Wednesday on New York's Long Island, Trump posted on his Truth Social network that he would "get SALT back," a reference to the state and local tax deduction that Trump and Republicans capped at $10,000 per return. That cap, along with other major pieces of the law, is scheduled to expire at the end of 2025, making it part of a complex negotiation that the next president and Congress will navigate. A Populist Democrat Fights to Survive the Trump-Fueled Populist Wave WEIRTON, W.Va.-Ask Sen. Sherrod Brown if he considers himself a populist, and this is how he'll answer: "Politics is not so much left or right; it's really, whose side are you on?" The Ohio Democrat's voice echoed in the emptiness of the decommissioned tin mill where he had come to announce new jobs on a recent weekday afternoon. "You can call yourself a lot of things, but my focus has always been on the dignity of work." Brown, 71 years old, is counting on his distinctive populist brand to save him as he stares down the fight of his political life. His race for re-election to a fourth term, in a state that has trended away from his party, is one of two contests-along with Sen. Jon Tester's race in Montana-most likely to determine which party controls the Senate. Hezbollah Pagers Explode in Apparent Attack Across Lebanon BEIRUT-Pagers carried by thousands of Hezbollah operatives exploded at about the same time Tuesday afternoon in what appeared to be an unprecedented attack that authorities said injured almost 2,800 and killed nine across Lebanon. Many of the affected pagers were from a new shipment that the group received in recent days, people familiar with the matter said. A Hezbollah official said many fighters had such devices, adding that some people felt the pagers heat up and disposed of them before they burst.