Major US stock indexes have declined significantly, a catalyst for which were the outcome of the Fed meeting and statements by Fed Chairman Powell, who made it clear that lowering the rate is not the beginning of a long mitigation cycle, but an adjustment in the middle of the cycle,

The Fed lowered the rate by 25 bp, as market participants expected. For such a decision were all, except for two members of the FOMC. The Fed described the state of the economy as strong, but also said that “in the light of the consequences of events in the world, for the prospects of the economy and restrained inflationary pressure”, lowering rates is now the right step. This is the first reduction in rates under the chairmanship of Powell, as well as the first decrease since the end of 2008, when the Central Bank lowered rates to almost zero / The Fed statement indicated that the labor market remains strong and economic growth continues at a moderate pace, while continue to spend cash.

Meanwhile, Fed Chairman Powell said that lowering rates should be viewed as a “mid-cycle adjustment” that will help the economy develop as the Fed wants. Powell noted that he thinks that in general, a change in the Fed's monetary policy this year from hard to soft will help the economy. He added that lowering the rate would “work through trust channels,” as well as by reducing the cost of short-term borrowing.

In addition, the last round of trade negotiations between the US and China ended on Wednesday without any major breakthrough. The Chinese Ministry of Commerce reported that both sides will meet again in Washington in September.

Market participants also analyzed a report from ADP, which showed that employment in the private sector increased by 156,000 jobs in July, after rising by 112,000 jobs in June. Economists predicted that employment would increase by 150,000 jobs, compared with the addition of 102,000 jobs that were originally reported in the previous month.

Most of the components of DOW finished trading in the red (26 out of 30). The outsider was Microsoft Corporation (MSFT; -2.70%). The leader of growth were shares of Apple Inc. (AAPL; + 2.57%).

Almost all sectors of the S & P recorded a decline. The largest decline was shown by the technology sector (-1.2%). Only the conglomerate sector grew (+ 0.3%).

At the time of closing:

Dow 26,864.27 -333.75 -1.23%

S & P 500 2,980.38  -32.80 -1.09%

Nasdaq 100 8,175.42 -98.19 -1.19%

U.S. stock-index futures rose moderately on Wednesday, as investors cheered strong quarterly results/guidance from Apple (AAPL),while awaiting the Federal Reserve’s latest monetary policy decision.

Global Stocks:

(company / ticker / price / change ($/%) / volume)

Apple (AAPL) target raised to $240 from $230 at BofA/Merrill

Apple (AAPL) target raised to $265 from $245 at Monness Crespi & Hardt

General Electric (GE) reported Q2 FY 2019 earnings of $0.17 per share (versus $0.19 in Q2 FY 2018), beating analysts’ consensus estimate of $0.12.

The company’s quarterly revenues amounted to $28.831 bln (-1.1% y/y), in line with analysts’ consensus estimate of $28.833 bln.

The company also raised its FY 2019 EPS guidance to $0.55-0.65 from $0.50-0.60 (versus analysts’ consensus estimate of $0.59) and raised Industrial Segment Organic Revenue Growth to mid-single-digit growth from low- to mid-single-digit growth.

GE rose to $10.94 (+3.99%) in pre-market trading.

Advanced Micro (AMD) reported Q2 FY 2019 earnings of $0.08 per share (versus $0.14 in Q2 FY 2018), in line with analysts’ consensus estimate.

The company’s quarterly revenues amounted to $1.531 bln (-12.8% y/y), generally in line with analysts’ consensus estimate of $1.523 bln.

The company also issued downside guidance for Q3 FY 2019, projecting revenues of $1.75-1.85 bln versus analysts’ consensus estimate of $1.94 bln.

For the full year 2019, AMD now expects revenue to increase a mid-single-digit percent over 2018, down from high single-digit growth prior and versus analysts’ consensus estimate of +6.3%.

AMD fell to $32.12 (-5.17%) in pre-market trading.

Apple (AAPL) reported Q FY 2019 earnings of $2.18 per share (versus $2.34 in Q3 FY 2018), beating analysts’ consensus estimate of $2.10.

The company’s quarterly revenues amounted to $53.809. bln (+1.0% y/y), generally in line with analysts’ consensus estimate of $53.394 bln.

The company also issued upside guidance for Q4 FY 2019, projecting revenues of $61-64 bln versus analysts’ consensus estimate of $60.92 bln and gross margin of 37.5-38.5% versus analysts’ consensus estimate of 38.3% and 38.3% last year.

AAPL rose to $217.34 (+4.10%) in pre-market trading.