Every weekday, CNBC’s Investing Club with Jim Cramer releases the Homestretch, providing an actionable afternoon update just in time for the final hour of trading on Wall Street.
In a highly anticipated moment, the Federal Reserve announced on Wednesday afternoon a cut in its benchmark overnight lending rate by a quarter percentage point, lowering the target range to between 4% and 4.25%. Out of the 12 voting members in the Fed’s policymaking committee, only one dissenter emerged: newly appointed Fed Governor Stephen Miran, who also chairs the Council of Economic Advisers. An ally of former President Donald Trump, Miran advocated for a half-point reduction, reflecting his stance for more aggressive rate cuts.
While the move was largely expected, investors were keen to hear the official verdict and Fed Chairman Jerome Powell’s insights. This meeting occurs amidst a complex economic backdrop, with inflation rates rising even as the job market shows signs of weakness. The Fed’s statement acknowledged the evolving risks to its dual mandate, noting that “downside risks to employment have risen.”
During his post-meeting conference, Powell characterized the reduction as a “risk management cut,” aiming to balance potential economic uncertainties. As the markets reacted to the decision, the S&P 500 exhibited volatility, initially rising but trading modestly lower—around 0.2% down—as of 3:15 p.m. ET. The Dow Jones Industrial Average displayed similar behavior, managing minor gains but losing some of its post-decision momentum.
Noteworthy movements were also observed in the bond market, where the yield on the benchmark 10-year Treasury note rallied to daily highs after initially dipping following the Fed’s announcement. Among the affected stocks was Home Depot, positioned to benefit from lower long-term rates that could stimulate housing activity.
The Fed’s quarterly Summary of Economic Projections was another focal point, especially its “dot plot,” which outlines projections for interest rates, inflation, unemployment, and economic growth. Of particular interest, nine Fed members believe that two more rate cuts could occur by the end of the year, indicating potential quarter-point reductions in both October and December meetings. A single outlier projected five rate cuts before year-end—a stance attributed to Miran. Meanwhile, the Fed’s median forecast for 2026 suggests only one rate cut, reflecting a more cautious outlook than anticipated. The forecast for the unemployment rate remained unchanged at 4.5% for year-end, aligning with previous projections.
In the realm of initial public offerings (IPOs), the week has been busy with multiple companies seeking to go public. Both StubHub and WaterBridge Infrastructure commenced trading on the New York Stock Exchange on Wednesday, with major banks such as Goldman Sachs and JPMorgan overseeing the offerings. Additional IPOs are expected from Netskope and Pattern Group later this week. Reports also suggest that fitness app Strava is exploring a potential IPO as early as next year, having invited banks, including Goldman Sachs, to pitch their involvement.
Looking ahead, key earnings reports from the restaurant sector are forthcoming. Cracker Barrel is set to release its results after Wednesday’s market close, while Olive Garden parent Darden Restaurants will report before the market opens on Thursday. These earnings could provide insights relevant to other investments, including Texas Roadhouse. Additionally, DuPont’s upcoming Investor Day will focus on future company developments following the spin-off of Qnity Electronics.
On the economic data calendar, Thursday will feature weekly initial jobless claims and continuing claims reports. Subscribers can also look forward to the September Monthly Meeting for Club members, scheduled for a noon ET livestream. For members of the CNBC Investing Club with Jim Cramer, trade alerts will precede any trading activity in the portfolio. Cramer implements a waiting period before executing trades that he discusses on CNBC TV to ensure transparency and accountability.
The information provided in the Investing Club remains subject to certain terms and conditions, including disclaimers on fiduciary obligations and profit guarantees.
