The Federal Reserve approved a quarter-point interest rate cut Wednesday, the first in nine months, with officials judging that recent labor-market softness outweighed setbacks on inflation. A narrow majority of officials penciled in at least two additional cuts this year, implying consecutive moves at the Fed’s two remaining meetings in October and December. The projections hint at a broader shift toward concern about cracks forming in the job market in an environment complicated by major policy shifts that have made the economy harder to read. The rate cut will reduce the benchmark federal-funds rate to a range between 4% and 4.25%, the lowest level in almost three years. The cut should provide some immediate relief to consumers with credit-card balances and small businesses with variable-rate debt. Mortgage rates and other long-term borrowing costs are less sensitive to individual Fed moves, but have declined in recent weeks as investors anticipate a modest sequence of additional cuts. The central bank's next monetary policy meeting is scheduled for October 28-29, with CME Group's FedWatch tool currently indicating an 89.1 percent chance the Fed will lower rates by another quarter point.

On Wednesday, the SMI lost 0.2 percent to 11,999 points. Of the 21 SMI stocks, twelve lost ground and nine gained. A total of 15.9 (previously: 17.26) million shares were traded. The SMI was led by Partners Group, the share price of which rose by 1.9 percent. The company had announced a strategic partnership with PGIM, the investment management arm of Prudential Financial. The collaboration is designed to develop multi-asset portfolio solutions for individual and institutional investors. Index heavyweight Nestlé shed 0.5 percent. Following the abrupt dismissal of the CEO at the beginning of the month, the chairman of the board of directors has now also announced his resignation. The 2.2 percent or CHF 3.25 decline in Richemont shares was mainly due to the dividend discount of CHF 3.00. Among the financial stocks having been battered on Tuesday, Swiss Re recovered by 0.8 percent. Zurich closed virtually unchanged, while Swiss Life declined by 0.3 percent. UBS shares advanced by 0.6 percent.

Europe
European stock markets closed directionless on Wednesday ahead of the Federal Reserve's monetary policy announcements scheduled for the evening. The Stoxx Europe 600 index ended the day virtually unchanged at 550.6 points. In Paris, the CAC 40 and SBF 120 each shed 0.4%. In Frankfurt, the DAX 40 gained 0.1%, as did the FTSE 100 in London. EUTELSAT (-3.3%): AlphaValue downgraded its opinion on the satellite operator's stock from “buy” to “accumulate” and reduced its target price from €4.26 to €3.73. The research firm took into account the group's upcoming €1.35 billion recapitalisation, which will significantly dilute the number of Eutelsat shares in circulation. SOLVAY (-1.8%): Morgan Stanley downgraded its recommendation from “neutral” to “underweight” and lowered its target price from €30 to €25. Pressure on the chemical company's short-term results could translate into increased market sensitivity regarding its dividend, according to Morgan Stanley analysts. SANOFI (+0.8%): The pharmaceutical group revealed on Wednesday that it had received new positive data on its experimental molecule brivekimig in moderate to severe hidradenitis suppurativa (HS).

United States
Stocks turned in a bland performance throughout much of the session on Wednesday before seeing substantial volatility in afternoon trading following the Federal Reserve's highly anticipated monetary policy announcement. While the Dow climbed 260.42 points or 0.6 percent to 46,018.32, the S&P 500 edged down 6.41 points or 0.1 percent to 6,600.35 and the Nasdaq shed 72.63 points or 0.3 percent to 22,261.33. The late-day volatility on Wall Street came following the Federal Reserve's widely expected announcement of its decision to lower interest rates by a quarter point. Banking stocks showed a strong move to the upside with the KBW Bank Index climbing by 1.3 percent to a record closing high. On the other hand, oil service stocks moved lower along with the price of crude oil, dragging the Philadelphia Oil Service Index down by 1.1 percent. Nvidia shares plunged 2.6 percent. According to the Financial Times, China has banned the country's largest tech companies from purchasing Nvidia chips for artificial intelligence applications. The Chinese Cyberspace Administration instructed companies such as Bytedance and Alibaba this week to stop testing and ordering the RTX Pro 6000D chip, Nvidia's tailor-made product for the country, the newspaper reported, citing three people familiar with the matter. Workday shares rose 7.3 percent. Elliott Investment Management disclosed having invested more than $2 billion in the HR software company shortly after Workday revealed it would acquire AI-focused company Sana for $1.1 billion.

Asia
Asian stocks were mixed on Thursday. The benchmark Nikkei 225 Index closed the morning session at 45,277.43, up 487.05 points or 1.09 percent, after touching a high of 45,296.21 earlier. In the tech space, Advantest is gaining more than 2 percent, Tokyo Electron is advancing more than 4 percent and Screen Holdings is surging almost 5 percent. Conversely, Tokyo Electric Power is tumbling more than 6 percent and Tokyo Gas is losing almost 5 percent. Elsewhere in Asia, China, South Korea, Indonesia and Taiwan are higher by between 0.2 and 1.0 percent each. New Zealand and Malaysia are down 0.8 and 0.6 percent, respectively. Hong Kong and Singapore are relatively flat.

Bonds
Long-dated U.S. government debt yields slipped on Wednesday. The 10-year Treasury note yield dipped just below the 4.00 percent mark immediately after the Fed's decision, but then picked up 4 basis points to 4.07 percent. A 25 basis point interest rate cut had been fully priced in, according to analysts.

Analysis
UBS lowers Givaudan target to CHF 3,600 (3,650) – Neutral
UBS raises Inditex to Buy (Neutral) – Target EUR 52 (48)
Bossard target price: Research Partners upgrades to CHF 200 (175) – Hold
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