Ebbing Interest Rate Euphoria Among US Investors
Market Reactions, Commodities, and Individual Stocks: Analysis Following the Fed Decision and Warren Buffett's Investment

The interest rate euphoria of US investors, which flared up after the recent decision by the US Federal Reserve (Fed), now seems to be subsiding somewhat. Analysts warn that the markets have largely already priced in the interest rate cuts announced by Fed Chair Powell. On December 14, 2023, the Dow Jones Index was trading with a slight increase of 0.2 percent at 37,152 points. The broader S&P 500 also saw a slight uptick of 0.1 percent to 4,710 points, while the Nasdaq Index remained stable at 14,712 points.
The interest rate cuts were particularly expected following Powell's announcement of loosening monetary policy, after the Fed had kept the federal funds rate in the range of 5.25 to 5.50 percent for the third consecutive time. The central bank now anticipates an average reduction of 0.75 percentage points in the federal funds rate for the next year. This news led to the Dow Jones closing at an all-time high, which was perceived by many investors as a surprising shift in Powell's rhetoric.
Nevertheless, experts warn of a possible correction in the stock market as the record rally continues. As an indicator of market sentiment, CNN Business's "Fear & Greed Index" is used, which is currently in the "Greed" territory and is on the verge of entering "Extreme Greed." This suggests the risk of overheating on Wall Street, and investors should be prepared for potential corrections if the index continues to rise.
In the commodity market, investors showed increased interest in oil and copper. Prices for North Sea Brent oil and US WTI oil both rose by about four percent to $77.14 and $72.27 per barrel, respectively. The price of copper also saw an increase of nearly three percent to $8,563 per ton. In contrast, the US dollar weakened, and the dollar index fell by one percent to its lowest level since early August, while the euro rose by 1.1 percent to $1.0993.
Regarding individual stocks in the stock market, there were interesting developments. The US software company Adobe disappointed investors' expectations for the new fiscal year 2023/24, leading to a drop in the stock price by about six percent. In contrast, the biotech company Moderna experienced a strong increase of around 10 percent after positive study results for a cancer vaccine were announced. Another noteworthy development was Warren Buffett's investment firm Berkshire Hathaway increasing its stake in Occidental Petroleum, a US oil company. This investment led to a 3.3 percent increase in Occidental's shares, although Berkshire Hathaway emphasized that it had no intention of taking over the company.





