The risks of rate cuts, TikTok fights ban bill: Asking for a Trend
On today's episode of Asking for a Trend, Host Josh Lipton breaks down some of the top stories and trends from the trading day. Investors are all but certain the Federal Reserve will cut interest rates at its September meeting on Wednesday. But the question of by how much — 25 or 50 basis points — has been hotly debated. Wall Street Journal Chief Economics Commentator and Deputy Economics Editor Greg Ip lays out the case for a half-point cut, explaining, "It all starts out by looking at where rates are now," Ip says, noting that the current target rate of 5.25%-5.50% is the highest in 20 years. Rates were initially pushed that high because of sticky, elevated inflation. But in recent months, inflation has cooled considerably. The major indexes (^DJI, ^IXIC, ^GSPC) closed Monday mixed after disappointing iPhone 16 pre-order numbers caused Apple (AAPL) to slip and pull the Nasdaq down along with it. Yahoo Finance senior reporter Jared Blikre analyzes the day’s top market movements, including the surge in cyclical sectors such as utilities (XLU), the weight of the Federal Reserve's interest rate decision later this week, and September's seasonality trends. TikTok spent Monday in court in the first day of its trial arguing against the US bill that could see the popular social media app banned in the United States if parent company ByteDance doesn't sell the platform to a non-Chinese entity. Axios Business Editor Dan Primack explains that the judge in the case was "fairly skeptical of TikTok's arguments," adding, "But what's important to note is the President of the United States does not have to ban it if there's not a divestiture, it gives the president the option to ban it. You've already got Donald Trump saying he would not ban TikTok." Intel (INTC) and Amazon (AMZN) Web Services announced a co-investment in custom chip designs in a multibillion, multi-year strategic collaboration. Creative Strategies CEO and principal analyst Ben Baron explains that Intel has won a large customer in AWS, saying, "there's positive momentum there in terms of getting foundry wins." He believes that Intel is ultimately setting the stage to split into two companies: Intel and an Intel foundry. He believes that having an Intel Foundry subsidiary is "essentially as close as you can get to putting the right kind of walls and guardrails around Intel Foundry so that other customers can come in and feel comfortable knowing that they'll have capacity wafer allocation." This post was written by Melanie Riehl
