Overnight US stocks | The Federal Reserve begins cutting interest rates, US stocks surge then fall with all three major indexes closing lower, while the small-cap Russell 2000 index sees a six-day rise.

On Wednesday, the three major indexes closed lower. In intraday trading, the S&P 500 index rose to a high of 5689.75 points, and the Dow rose to a high of 41981.97 points, both hitting new intraday highs. The Federal Reserve unexpectedly announced a substantial 50 basis point rate cut, initiating a rate cutting cycle, with Chairman Powell emphasizing that the US economy remains strong. [US Stocks] At the close, the Dow fell 103.08 points, or 0.25%, to 41503.10 points; the Nasdaq fell 54.76 points, or 0.31%, to 17573.30 points; and the S&P 500 fell 16.32 points, or 0.29%, to 5618.26 points. The small-cap index Russell 2000, which is dominated by value stocks, closed up 0.04%, marking the sixth consecutive rise and setting a new high since August 30th. Intel Corporation (INTC.US) fell 3.26%, and Trump Media & Technology Group (DJT.US) fell 3.22%. The Nasdaq Golden Dragon Index fell 0.86%, while XPeng, Inc. ADR Sponsored Class A (XPEV.US) fell 4.49%. [European Stocks] Major European indexes fell, with the Germany DAX30 index slightly down, the UK FTSE 100 index down 0.68%, the French CAC40 index down 0.57%, and the EuroStoxx 50 index down 0.52%. [Asia-Pacific Stock Markets] The Nikkei 225 index rose 0.49%, the Jakarta Composite Index fell 0.03%, and the VN30 index in Vietnam rose 0.56%. [Gold] Spot gold was reported at $2560.34 per ounce, previously reaching a high of $2600 per ounce. [Cryptocurrencies] Bitcoin remained stable at $60246.9. A recent report from Matrixport noted that the US spot Bitcoin ETF fund flow was slowing down as expected in September, which is usually a weak period. However, the recent upward trend of Bitcoin suggests that this month's performance may exceed expectations. As October is historically a strong month for Bitcoin, investors may take advantage of the September pullback to position themselves for potential opportunities in the fourth quarter. [Oil] US WTI crude oil closed slightly lower on Wednesday. The market is evaluating the impact of the Federal Reserve's 50 basis point rate cut on oil prices. New York Mercantile Exchange's October-delivery West Texas Intermediate (WTI) crude oil futures fell 28 cents, or 0.39%, to close at $70.91 per barrel. [Metals] London metals saw mixed results, with nickel up 0.25%, copper up 0.35%, and zinc down 1.23%. [Macro News] The Federal Reserve announced a 50 basis point rate cut. In the early hours of September 19 Beijing time, the Federal Reserve announced a 50 basis point cut in the federal funds target rate range to a level between 4.75% and 5.00%, the first rate cut since March 2020. The Federal Reserve had raised rates continuously from March 2022 to July 2023, with a total increase of 525 basis points. Over the past year, the Federal Reserve had maintained the federal funds target rate range at 5.25% to 5.5%, the highest level in 23 years. Powell: No consideration for stopping balance sheet reduction, balance sheet reduction can proceed simultaneously with rate cuts. Federal Reserve Chairman Powell stated during a press conference that the Federal Reserve will not consider stopping the reduction of its balance sheet, and can reduce the balance sheet and cut rates simultaneously as long as reserves remain stable. He said, "Recent reductions in the Federal Reserve's balance sheet have mainly come from overnight borrowings. I want to tell you that we have not considered stopping balance sheet reduction because of this. We know that these two things can happen at the same time. In a sense, they are both forms of normalization, so for a period of time, you can reduce the balance sheet while also cutting rates." "The Federal Reserve megaphone": The Federal Reserve is actually making up for lost time. Nick Timiraos, known as the Federal Reserve's "megaphone," wrote in his latest article that the Federal Reserve's decision to cut rates by 0.5% today, the first rate cut since 2020, marks a more bold beginning. Powell's decision to cut rates by more than most analysts expected a few days ago shows that the Federal Reserve is firmly entering a new phase of fighting inflation: the Federal Reserve is currently trying to prevent previous rate hikes from further weakening the US labor market. Powell stated during the press conference, "We are committed to maintaining our economic strength." "This decision reflects our increasing confidence that by appropriately adjusting our policy stance, we can maintain the strong momentum in the labor market." While some Federal Reserve officials have argued in recent weeks that the economy is not weak enough to require a 50 basis point rate cut, others have concluded that cooling in the labor market this summer provides reason to further cut rates, as the Federal Reserve is actually making up for lost time. Federal Reserve initiates rate cuts, attractiveness of emerging market assets expected to increase. Following the Federal Reserve's 50 basis point rate cut, Carlos Dosset, manager of Vontobel's emerging market debt portfolio, stated that the global financing environment will continue to loosen in the coming months, helping emerging market central banks continue their easing policies. This will create space for multiple emerging market central banks to restart or continue their easing cycles that had already begun before the Federal Reserve. Lower risk-free rates in developed countries will also lower external borrowing costs for emerging market issuers, reducing refinancing risks and improving debt sustainability. The easing cycle will encourage asset allocators to increase their exposure to emerging markets, as the attractiveness of money market tools and core developed country interest rates will gradually decline. [Individual Stock News] NVIDIA Corporation (NVDA.US) plans to acquire startup OctoAI for $165 million. NVIDIA Corporation plans to acquire the Seattle-based startup OctoAI, currently in advanced negotiations. OctoAI primarily sells software designed to enhance the efficiency of artificial intelligence models. According to a letter sent to shareholders, NVIDIA Corporation intends to enhance its software through this acquisition.With cloud computing service capabilities. According to documents sent by OctoAI to shareholders, NVIDIA Corporation has proposed to acquire the company for about $165 million, but this does not yet take into account the company's debts and other expenses. Analysts believe that this offer may not result in substantial returns for OctoAI's shareholders, especially employees. According to the merger documents, common stockholders can only receive two cents per share, and former employees who exercised vested options at a higher price when leaving may suffer losses. OctoAI has raised $132 million from investors, including Tiger Global Management, Madrona Venture Group, and Amplify Partners, with a valuation of approximately $900 million in 2021. According to reports, OctoAI was founded five years ago, formerly known as OctoML, founded by the creator of an open-source project Apache TVM at the University of Washington in 2019. Initially, the company focused on helping developers deploy machine learning models, but last year it shifted to selling a service that allows developers to quickly fine-tune open-source or custom AI models, regardless of the type of chip the models are using.General Motors Company (GM.US) has started selling electric vehicle adapters for accessing Tesla, Inc.'s (TSLA.US) supercharging stations. General Motors Company announced the launch of a new electric vehicle adapter, which allows its electric vehicle users to access Tesla, Inc.'s supercharging network. This move means that General Motors Company's electric vehicle drivers will be able to charge at over 17,800 Tesla, Inc. supercharging stations worldwide. The introduction of this adapter not only provides General Motors Company's electric vehicle users with a wider range of charging options, but also reflects the company's active efforts in promoting the development of the electric vehicle industry and charging infrastructure. Through its collaboration with Tesla, Inc., General Motors Company has further expanded its electric vehicle charging network, providing consumers with a more convenient charging experience and helping to accelerate the adoption of electric vehicles. Microsoft Corporation (MSFT.US) and others announced the establishment of a $300+ billion AI investment fund. Microsoft Corporation recently announced the formation of the Global AI Infrastructure Investment Partnership (GAIIP) in collaboration with BlackRock, Inc., Global Infrastructure Partners (GIP), and the UAE-based AI investment company MGX, to invest in emerging and expanding data centers. The majority of these infrastructure investments are said to be focused in the United States to drive AI innovation and economic growth, with the remaining portion being invested in partner countries in the U.S. Additionally, NVIDIA Corporation will also provide support to GAIIP, including expertise in AI data centers and AI factories. Major Bank Ratings UBS Group AG: Reaffirmed a "Buy" rating on NVIDIA Corporation (NVDA.US) and raised the target price from $120 to $150.