The Federal Reserve's interest rate cut clears obstacles, and the US stock IPO market welcomes a "busy October".

The Fed's rate cut clears the way for private companies waiting for the green light to jump into the US IPO market. Industry observers say that a wide range of companies, from the tech industry to the service industry, are expected to publicly submit IPO applications in the days and weeks following Wednesday's rate cut, or begin marketing activities for such transactions. Many companies considering going public in the fall have been waiting for this decision, while also watching the performance of newly listed companies, which have had mixed results. West Riggs, head of stock capital markets at Troyst Securities, said, "Certainly there are companies waiting to pass this hurdle just to make sure there are no surprises. The schedule for October is expected to be very busy." Several companies, including Neptune Insurance Holdings and the owner of Phoenix University, have already publicly submitted filings to US regulators and may begin roadshows in the coming days after the mandatory 15-day waiting period. Bankers expect more companies to go public as the US stock market benchmark approaches historical highs and volatility indicators show relative calm - conditions considered favorable for initial public offerings. According to data compiled by Bloomberg, 14 companies have raised $7 billion through US IPOs so far this month, excluding SPACs, REITs, and closed-end funds, the highest level before September in the 18 days since 2020. Riggs said that if the market remains strong, the number of significant transactions in October could exceed this month. Labor Day holiday has seen a resurgence in US IPO activity The beginning of the Fed's easing cycle may create an opportunity for companies seeking listings, which have been pent up. Companies hoping to go public in October need to submit applications in the next few weeks, or risk delaying their IPO plans until 2026 to avoid the typical slowdown around the holiday season. Will Brouthigham, head of US capital markets transactions at Deloitte, said that several issuers are expected to update market plans, including "timing, pricing, and scheduling" details. The Fed's decision should prompt companies to take these measures, as it represents "a piece on the chessboard, letting us know how to price the market, which means it will drive demand for more IPOs in the coming weeks." Last week, the fall window opened with the most IPO companies raising $250 million or more since October 2021. However, compared to the stunning gains seen in the summer, the performance of these companies has been more moderate, with the median stock price of companies going public this month increasing by 8.7% as of Wednesday's close. Facing underperformance, the stock prices of companies like StubHub Holdings and Gemini Space Station have fallen below their IPO prices, while Figure Tech Solutions and Black Rock Coffee Bar have seen stock prices rise by over 35%. However, new public companies need to trade well to encourage investors to welcome newcomers. Brouthigham said that seeing more recently listed companies trading below their IPO prices may force the market to reassess trades. He said, "There are some positive and cautionary factors, namely that the tool must continue to deliver returns for investors."