Weekly financial markets roundup: September 16 – 20, 2024

This week was all about key interest rate decisions from major central banks. The Federal Reserve surprised markets with a 50 basis point rate cut, while the Bank of England held its rate steady, and the Bank of Japan maintained its September policy unchanged, as widely expected. Amid this backdrop, market volatility surged, with the Dow hitting a historic high, alongside gold. Bitcoin also saw a significant rise, reflecting growing interest from investors. 

Stay tuned for a detailed recap of this week’s market events in our full report.

Stocks surge a day after Federal Reserve's first interest rate cut since 2020 🇺🇸

Stocks surged a day after the Federal Reserve implemented its first interest rate cut since 2020, slashing the benchmark rate by 0.50 percentage points. Investors welcomed the move as a preemptive strike against a potential slowdown in U.S. economic growth. 

The Dow Jones ($DJIUSD) rallied 479 points (1.1%) to close at 42,025, while the S&P 500 ($SPXUSD) jumped 95 points (1.7%) to finish at 5,715, and the Nasdaq ($NDXUSD) surged 2.5%. 

“Stocks are exploding higher as markets absorb the Fed’s outsized rate cut,” noted Adam Crisafulli from Vital Knowledge. 

Lower rates stimulate markets by making borrowing cheaper and boosting the value of riskier assets such as equities, gold, and cryptocurrencies.

For a detailed analysis of market reactions, check out our full article here.

Bank of England holds interest rate at 5% 💷

At its September meeting, the Bank of England decided to maintain its base interest rate at 5% annually, aligning with market expectations. While some investors anticipated a potential rate cut, only one out of the nine members of the Monetary Policy Committee (MPC) supported the idea. 

The $GBPUSD continues to trade strongly near the 1.3300 mark, its highest level since March 2022, buoyed by the BoE’s decision and a dovish shift from the Fed, which is driving USD weakness.

The technical outlook remains favorable for GBP bulls, supporting further gains in the near term.

Gold consolidates weekly gains, eyes $2,600 and beyond 🏅

Gold prices ($XAUUSD) are holding steady early Friday, building on the previous day’s rebound as the US Dollar and Treasury bond yields softened overnight. The precious metal continues to consolidate its weekly gains, with investors now turning their attention to upcoming speeches from US Federal Reserve policymakers for new insights into the future of interest rates. With market momentum favoring gold, traders are eyeing a potential move towards the $2,600 mark and beyond.

Bitcoin surges 6% following Fed’s 50 basis point rate cut 📈

Bitcoin ($BTCUSD) surged 6% in the last 24 hours, trading near $63,000, after the Federal Reserve's decision to slash its benchmark interest rate by 50 basis points. The broader crypto market also benefited, with the total market capitalization rising 2% in response. 

Despite September traditionally being Bitcoin’s weakest month, the cryptocurrency is up 7% this time. However, traders remain cautious ahead of the Bank of Japan's upcoming policy meeting, which could have a notable impact on Bitcoin's future price trajectory.

BlackRock and Microsoft to create $30 billion AI investment fund 🤖

BlackRock, Global Infrastructure Partners (GIP), Microsoft ($MSFT), and MGX have announced the launch of the Global AI Infrastructure Investment Partnership (GAIIP). This initiative includes the creation of a $30 billion fund to finance AI-related infrastructure projects. According to the press release, the partnership aims to meet the increasing demand for computing power. The fund will focus on supporting infrastructure projects, including data centers and new energy sources to power them.

Summary 📊

This week saw significant market movement with the Federal Reserve’s 50 basis point rate cut, driving a 6% surge in Bitcoin and record highs for the Dow. The Bank of England held rates at 5%, while the Bank of Japan maintained its policy, adding to market volatility. Gold continued its climb towards $2,600, and the crypto market strengthened overall. Meanwhile, BlackRock and Microsoft announced a $30 billion AI infrastructure investment fund, responding to rising demand for data centers and energy solutions. 

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