What Stocks Will Do After Fed Rate Cut Pause
Stock markets barely moved after the Federal Reserve maintained the Fed funds rate a 4.25 percent and 4.50 percent. Fed Chair Powell reasoned that the central bank needed to observe the tariff situation throughout the summer before making the next move.
The job market is strong, wages are growing, and inflation is muted at 0.1% in May 2025, yet uncertainties persist. Fortunately, tariff-related unknowns peaked just after the Liberation Day shocked stock markets. Since then, stock markets bounced back. Investors piled onto Microsoft (MSFT), Nvidia (NVDA), Palantir (PLTR), and Oracle (ORCL) in the tech sector. Apple (AAPL) shares pulled back, losing nearly 9% in the last three months.
The war between Israel and Iran may increase volatility in stock markets. However, the VXX ETF usually pulls back, continuing its long-term downtrend.
Investors will return to making decisions based on fundamentals. For example, credit card firms like Visa (V) and Mastercard (MA) dropped on Wednesday. The Senate passed a bill that legitimizes stablecoins as a means to conduct transactions.
Coinbase (COIN) shares added around 17% to trade close to $300. Conversely, Block (XYZ) did not move, while PayPal Holdings (PYPL) fell. The stock found support at $68.43, its 52-day simple moving average.
Bank shares rose, with Wells Fargo (WFC), Bank of America (BAC), and Bank of New York (BK) trading higher on Wednesday.
