Week in Review: Federal Reserve cuts rates for first time this year

Major U.S. stock indexes hit record highs during the week. The Nasdaq Composite advanced 2.21%, while the S&P 500 and Dow Jones Industrial Average gained 1.22% and 1.05%, respectively. Meanwhile, the yield on the U.S. 10-year Treasury note rose 6 basis points to 4.13%.

President Trump and Chinese President Xi Jinping spoke by phone on Friday. Chinese state media described the talks as “pragmatic and constructive.” Xi emphasised the importance of US-China relations, urged Washington to avoid unilateral trade actions, and expressed support for a TikTok resolution that separates its U.S. operations from its Chinese parent. Trump said on social media that the TikTok deal was approved and progress was made on trade, fentanyl, and the Russia-Ukraine conflict. The leaders are set to meet at the APEC Summit in late October, with Trump planning a visit to China in early 2026.

In commodities, Brent oil dipped 0.34% on the week, while gold advanced 1.14% as investors reacted to the Federal Reserve’s first rate cut of the year and monitored signals on future policy.

Market Moves of the Week

The All-Share Index rose 1.58% this week, boosted by Resources and Industrials. The local currency strengthened against the U.S. dollar, moving to R17.33/$ from last week’s R17.39/$ level. The 10-year SA government bond extended its year-to-date rally, with yields falling 18 basis points over the week.

Chart of the Week:

The dollar dropped this week to its lowest level since the start of the Fed’s 2022 rate-hike cycle.This is what President Donald Trump’s administration wants and eases financial conditions for anyone around the world who needs to finance in dollars. Source: Bloomberg.

Credits: Strategiq