S&P 500 falls even with most stocks rising as traders dump AI names

The Federal Reserve delivered its second rate cut of 2025 as expected, taking its policy rate down 25 basis points to a range of 3.75% to 4%. Officials also said they plan to stop reducing the size of their balance sheet as of December 1.

Stocks were little changed in the wake of this announcement, but fell during the press conference when Fed Chair Jerome Powell said that there were strongly differing views on whether or not to cut interest rates again in December, and that another reduction is “far from” a foregone conclusion. The SPDR S&P 500 ETF went on to pare much of its losses after Powell suggested that core PCE inflation isn’t really too far above 2%, once one strips out how tariffs are boosting price pressures. Stocks careened lower once again after Powell said a “growing chorus” of Fed officials support skipping a cut.

Event contracts traded on Robinhood showed a rate cut of this size was a lock for this meeting. Heading into the decision, a separate contract showed that the odds of 75 basis points in easing for 2025 was roughly 83%, implying a strong expectation that another 25 basis point reduction will be delivered at its December meeting. The prediction market implied odds of no more cuts in 2025 rose to as high as 27% from 14% after Powell’s comments about the internal debate within the central bank on how to proceed.

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions. Event contracts trading is offered by Robinhood Derivatives, LLC, a registered futures commission merchant with the CFTC.)

It’s the first time since 1995 that the US central bank has held one of its meetings during a government shutdown, which has left monetary policymakers with less data than usual to aid in their decision-making processes.

In their statement, monetary policymakers said that the unemployment rate “remained low through August,” adding that “more recent indicators are consistent with these developments.” All in all, this does not necessarily escalating concern about the state of the labor market, given that officials used the past tense to describe how downside risks to employment “rose in recent months.”

“I do wonder if officials will be comfortable cutting rates again on December 10 if they go into that meeting with no official data reflecting activity in October and November,” writes Omair Sharif, president of Inflation Insights. “It may be hard to reach a consensus on another cut, especially given the split in the FOMC indicated in the September dot plot.”

There were two dissents at this meeting, as Kansas City Fed President Jeff Schmid preferred no change, while Fed Governor Stephen Miran wanted a 50 basis point cut.

Shares of streamer FuboTV are surging on Wednesday, after Disney announced it completed its majority stake acquisition of the company.

Fubo will be merged with Hulu Live TV, creating a juggernaut virtual pay-TV company rivaling YouTube. With about 6 million subscribers, the program will also become the sixth-largest pay-TV operator in the US. According to the companies, Fubo and Hulu Live will also continue to be available as separate services, “each offering consumers multiple plan options from skinny to robust at compelling price points.”

Disney now owns 70% of the joint venture. As part of the deal, which was first announced in January, Fubo dropped its lawsuit against Disney, which sought to block its planned joint sports streaming venture, Venu Sports. Venu was dissolved within a week after the deal. Fubo shares closed up more than 250% on the day the deal was first announced.

As part of the transaction, Fubo will have access to a $145 million term loan from Disney next year.