Fed Cuts Rates Amid Economic Uncertainty; Nvidia and Intel Announce Landmark Partnership; China Curbs Chip Imports
Market Snapshot
- S&P 500: 6,600 (-0.10%)
- Dow Jones Industrial Average: 46,018 (+0.57%)
- NASDAQ Composite: 22,261 (-0.33%)
- US 10-Year Treasury: 4.07% (+0.05%)
- Gold: $3,660 (-0.78%)
- Bitcoin: $115,824 (-0.81%)
- Ethereum: $4,532 (+0.44%)
- FTSE 100 (U.K.): +0.14%
- CSI 300 (China): +0.61%
The U.S. Economy
The U.S. Federal Reserve has lowered its benchmark interest rate by a quarter of a percentage point, establishing a new range between 4% and 4.25%. The decision, the first rate reduction this year, was prompted by concerns over a weakening labour market, with Fed Chair Jerome Powell characterising the move as a "risk-management cut."
Job creation has decelerated significantly, with only 598,000 positions added through August compared to 1.4 million in the same period last year, and unemployment has risen to 4.3%. The decision was nearly unanimous, with the 12-member committee voting 11-1. The sole dissenter, newly confirmed governor Stephen Miran, argued for a more aggressive half-point reduction.
However, the move is complicated by signs of a resilient economy. Inflation has crept up from 2.3% to 2.9% since April, and U.S. retail sales increased more than expected in August for the third consecutive month. The central bank’s own economic projections have been revised higher for GDP and inflation, and lower for unemployment. This has led to a significant divergence within the Fed committee's predictions for the remainder of 2025, with opinions ranging from a rate hike to multiple additional cuts.
Corporate Movers
Major strategic shifts, M&A activity, and operational challenges are reshaping valuations across multiple sectors, from technology and consumer goods to healthcare.
Technology, Media, and AI
In a landmark deal, Nvidia announced a $5 billion investment in rival Intel. The two chipmakers will co-develop data centres and PC chips, a move that sent Intel shares soaring over 30% in premarket trading. The investment follows the U.S. government taking a 10% stake in Intel, underscoring its strategic importance as the only American company capable of domestically producing advanced chips.
In other technology news, Lyft (LYFT) shares surged over 13% after announcing a partnership with Waymo to launch self-driving taxis in Nashville next year, while competitor Uber's (UBER) stock fell 5%. Workday (WDAY) shares climbed over 7% following an analyst upgrade and the disclosure of a new $2 billion stake by activist investor Elliott. Walmart is also leaning into AI, developing several tools including an in-app assistant named "Sparky" to act on behalf of customers for tasks like reordering items.
In the media space, Disney (DIS) is taking a 2% equity stake in Webtoon Entertainment (WBTN) to create a digital comics hub. The collaboration will house over 35,000 comics from Disney, Marvel, and 20th Century franchises under a single subscription service. Separately, Penske Media has sued Google (GOOGL), claiming its AI-generated search overviews use its journalism without consent.
Consumer Goods, Airlines, and IPOs
The chocolate industry is facing pressure from cocoa prices that have nearly tripled since 2023. Hershey (HSY) has managed the challenge by successfully implementing price hikes of 26% and diversifying into salty snacks. These moves helped the company's net sales rise 26% in Q2 2025.
Ben & Jerry’s co-founder Jerry Greenfield announced he is leaving the business after nearly five decades. Greenfield stated he could not remain "in good conscience," claiming that parent company Unilever has restricted the brand’s ability to speak out on social and political issues. The departure comes as Unilever prepares to spin off its ice cream division.
Embattled budget airline Spirit Airlines has instructed employees to prepare for a lighter schedule and further headcount reductions, with plans to reduce its November capacity by 25% compared to the previous year. In the IPO market, ticket reseller StubHub (STUB) went public at $23.50 per share, valuing the company at $8.6 billion.
Health Sector
The race to develop effective weight-loss pills is intensifying between pharmaceutical giants Eli Lilly and Novo Nordisk. A new study showed that Novo Nordisk's oral version of semaglutide produced weight-loss results comparable to its popular Wegovy injection. Concurrently, late-stage trial data for Eli Lilly's experimental pill indicated it may be more effective than Novo's oral drug as a treatment for Type 2 diabetes.
Global Affairs
China has ordered its domestic technology companies to stop purchasing specific Nvidia (NVDA) chips designed for the Chinese market, including the RTX Pro 600D. Beijing has determined that its homegrown chips from firms like Huawei are now sufficiently advanced to replace Nvidia's lower-end products. This marks a significant step in its campaign for technological self-reliance and has helped the Hang Seng Tech Index soar 42% this year to a four-year high.
Separately, European Union companies are facing operational slowdowns due to major delays in obtaining export licenses for rare earth materials from China. Despite a prior agreement to speed up shipments, most licenses have not been approved, causing supply chain disruptions for critical industrial components.
Digital Assets
The U.S. Securities and Exchange Commission (SEC) has approved generic listing standards for commodity-based exchange-traded products. This will allow exchanges to list crypto ETFs without requiring a lengthy agency review for each fund, significantly streamlining the process. In line with this change, the agency approved Grayscale's Digital Large Cap Fund. Following the news, Coinbase has urged the Department of Justice to establish a uniform federal framework for crypto to override conflicting state-level regulations.
In the markets, Bitcoin's price dipped following the Federal Reserve's rate cut announcement. Meanwhile, the real-world adoption of stablecoins continues to grow. In parts of West Africa, citizens are using stablecoins to bypass costly banking fees, and on a corporate scale, Visa's stablecoin settlement volumes have quadrupled this year to an annualised run-rate of approximately $1 billion.
Finally, the AI boom is creating unique opportunities in real estate, with institutional investors increasingly buying industrial outdoor storage lots near motorways to store equipment for the rising number of data centre developments.
NOTE: This content is for informational and educational purposes only and does not constitute financial advice. Always do your own research. Not financial advice (NFA).