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Fed Poised for First 2025 Rate Cut as Weak Jobs Data Outweigh Inflation Concerns

  The Federal Reserve seal at its Washington, D.C. headquarters, where policymakers are set to decide on the first interest rate cut of 2025. The U.S. Federal Reserve is expected to lower its benchmark interest rate by 25 basis points today, marking its first rate cut of 2025 and the first since December last year. The move would bring the federal funds target range down to 4.00%–4.25%, as policymakers respond to slowing job growth and rising unemployment, even as inflation remains above the Fed’s 2% target. Recent labor market data showed just 22,000 jobs added in August, with earlier months revised downward, while the unemployment rate has climbed to around 4.3%. Inflation, measured by the Fed’s preferred PCE index, has edged higher in recent months, partly due to tariffs pushing up consumer prices. Markets have largely priced in the cut, with investors watching the Fed’s updated “dot plot” for clues on whether more reductions will follow in October and December. The decision ...
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GameStop Soars Amid Meme Frenzy, Dow Snaps Winning Streak

US stocks experienced a mixed session on Monday, with the Dow Jones Industrial Average snapping its impressive eight-day winning streak. Meanwhile, meme stocks made a comeback, led by GameStop (GME), which saw a significant surge. Here’s a summary of the key market movements:

Dow Jones Industrial Average (DJI)

  • The Dow Jones Industrial Average (^DJI) closed down 0.2%, ending its eight-day winning streak.
  • Investors largely adopted a wait-and-see approach, with attention focused on an upcoming inflation report that could signal potential interest rate cuts.

GameStop (GME) and the Meme Stock Rally

  • GameStop shares jumped a remarkable 74%, adding to the recent run-up for the video game retailer.
  • The resurgence in GameStop’s stock price was triggered by the return of “Roaring Kitty,” the retail trader who played a pivotal role in the 2021 meme stock craze. Keith Gill, known as “Roaring Kitty,” had been bullish on GameStop and contributed to the stock’s meteoric rise last year.
  • Other meme stocks also rallied, including AMC Entertainment (AMC), Tupperware Brands (TUP), and BlackBerry (BB).

Nasdaq Composite (IXIC) and S&P 500 (GSPC)

  • The tech-heavy Nasdaq Composite (^IXIC) moved up approximately 0.2%.
  • The S&P 500 (^GSPC) closed just below the flatline.

Market Sentiment and Economic Factors

  • Stocks have rebounded strongly in May, driven by better-than-expected earnings and renewed optimism regarding Federal Reserve monetary policy.
  • The Dow had notched eight consecutive daily wins before today, although the lack of significant economic releases likely played a part.
  • Recent inflation data has made investors more cautious, as they increasingly factor in the possibility of no interest rate hikes despite rising prices.

In summary, while the Dow’s winning streak came to an end, meme stocks stole the spotlight once again. Keep an eye on upcoming economic reports and central bank decisions as they continue to shape market sentiment.

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