Fed Chair Powell Signals Uncertainty on December Rate Cut, Markets React Sharply

U.S. stocks gave back early gains and finished mixed after Federal Reserve Chair Jerome Powell said a December rate cut is not a “foregone conclusion,” even as officials voted this week to trim rates by 25 basis points. Powell’s comments sent Treasury yields higher, knocking the S&P 500 to roughly flat and the Dow down about 0.16–0.2% while the Nasdaq/Composite managed gains and record closes earlier in the day. The market reassessed rate-cut odds (which fell from near-certain to roughly the high‑80s percent), reflecting “strongly differing views” among FOMC participants and at least one dissent. Higher yields particularly pressured small caps—the Russell 2000 fell about 0.9%—because smaller companies are more sensitive to short-term borrowing costs. Earlier strength had been fueled by easing trade tensions (talks of lower U.S. tariffs on Chinese goods, possible Nvidia chip access for China, and a U.S.–South Korea trade/shipbuilding deal), and housing data showed mortgage rates eased while pending home sales were flat.