Update: 2:30 p.m., 3:30 p.m. ET

Highlights from the Fed Press Conference

As Fed Chair Jerome Powell takes the stage, we'll prepare a bulleted highlight of the Chair's remarks below:

• TL;DR:Outlook for inflation and unemployment hasn't changed much, but greater risks exist in the labor market, bringing about today's cut. Structurally higher productivity is driving much of the growth, creating new optimism about economic growth without job creation.

• Data could be distorted by "technical factors":Powell says that the household survey and CPI could be affected by various technical factors.

• Buying treasuries?Money-market tightening pushed Fed to purchase shorter-term treasury securities to support effective control of policy rates.

• GDP Growth Forecast Revised Up:Consumer spending solid; business fixed investment expanding at a moderate pace, but housing market remains week.

• Labor demand has "clearly" softened:Layoffs and hiring remain low; shrinking labor force is a factor; unemployment at year-end is 4.5% and seen declining thereafter.

• Inflation has eased but remains "somewhat elevated":Very little data has been released since October, but PCE and Core PCE prices rose 2.8% year-over-year in September -- higher than earlier in the year.

• We could be in "plausible range of neutral" now:Policyholders see a median rate of 3.4% by the end of 2026, which isn't much lower than today's rates.

Questions from the Audience

Fed Chair Powell began taking questions immediately after his remarks. Here is a summary of some of the most interesting questions at the event:

• On the addition of "extent and timing" phrase:The Fed will "carefully evaluate incoming data" for the pace of rates, putting it in a broad range of neutral values.

• On why the forecast is up:Consumer spending has remained resilient, while spending on AI data centers has held up business investment, so "the baseline expectation for next year is ... a pickup in growth from today's relatively low level of 1.7%." The "implication" is productivity, which has been "structurally higher" in recent years.

• Is the 'risk management' phase of rate cuts over?"We're going to get a great deal of data between now and the January meeting and the data are going to factor into our thinking," Powell said. Where we're positioned now, Powell says we can wait and see how the economy evolves.

• Re: the path forward:A very large number of participants warn that risks to the upside are high for inflation and unemployment; you have one tool, you "can't do both at once."

• With policy closer to neutral, is it a foregone conclusion is that rates are down or two-sided from here?"I don't think that a rate hike is anybody's base case at this point and I'm not hearing that." However, some feel that rates should be stopped here or cutting more.

• Why did the committee decide to move today vs. January?Powell points out that unemployment, weak payrolls that means a loss of "about 20,000 jobs a month", plus a decline in supply and demand for workers. Services inflation is coming down, while goods inflation is rising, almost exclusively in sectors where there are tariffs. "It doesn't feel like a hot economy," Powell adds.

• Are money markets a concern?"QT went on and we had a framework in place for monitoring it; the overnight repo facility went down pretty close to zero, then in September, the Federal funds rate started to tick up within the range." He adds that the buildup was going to happen anyway due to Tax Day.

• On Supreme Court case involving Fed Governor Lisa Cook:"It's not something I want to address here; we're not legal commentators, it sits before the courts, and we don't think help matters..." by commenting on it.

• On comparisons to the 1990s:"When both goals are equally at risk, we should be at neutral ... We've been moving in the direction of neutral and are now in the high end of the range of neutral."

• On tariff inflation:"We actually look at all of the announcements and what you get from that and for each one of them, it's fully in -- if there's no new tariff announcements, inflation from goods should peak in the first quarter or so. We haven't been able to predict this with any precision; no one is. And from here, it shouldn't be big, just a couple tenths."

• On whether a new Fed Chairman nomination process impairs his job:"No."

• Why are you prioritizing the labor market instead of Americans' #1 concern?"As you know, we have a network of contacts in the U.S. economy [the 12 reserve banks] and we hear loud and clear how people are experiencing high costs; it's not the rate of inflation, it's the embedded cost ... The best we can do is to restore inflation to its 2% goal and also have a strong economy where people are getting jobs and making money." Powell adds that we'll need to have years where real wages will have to surpass inflation to make the country feel economically healthy again.

• On the overcount in jobs:"We think that has persisted" in payroll job numbers, which "forecasters generally understand." Powell adds that the Fed thinks it's about 40,000.

• How much is AI affecting the job market?"It's probably part of the story, but not a big part of the story... yet." He notes that unemployment claims have not risen significantly. Longer term, "Maybe this is different," but in the past, there have always been more jobs. "It certainly isn't showing up in layoffs yet."

• On K-Shaped economy:"It's clearly a thing; it's also clearly a thing that asset values, housing values, and securities values are higher and they tend to be owned by ... people who have more means."

• On productivity growth:Powell said he never thought I'd see a time where we'd have 2% productivity growth: "You can see the prospects for productivity" with AI or automation. He adds it might cause labor market implications. But with higher productivity, the neutral rate could be higher.

• On legacy:"My thought is that I really want to turn this job over to whoever replaces me with the economy in really good shape; I want inflation to be under control, back down at 2% and I want the labor market to be strong, and all my efforts are to get to that place."

Reaction

Around 2:45 p.m., when Powell talked about higher productivity, which he described as "structurally higher" -- creating higher growth without new job creation -- equities jumped and short-term yields fell. The Dollar Index declined.

By 3:22 p.m., the Russell 2000(+1.71%) was up nearly 2%, notching a new intraday high of 2,576. Meanwhile, the Dow(+1.15%), S&P 500(+0.74%), and Nasdaq(+0.43%) hit their highest points in the session.

Update: 2:04 p.m. ET

Fed Cuts Rates by Quarter Point as Expected

The Federal Reserve just cut interest rates -- as expected -- by a quarter point, bringing the target rate to a range between 3.50% and 3.75%.

There were three dissents; two voted to hold rates (Kansas City's Schmid and Chicago's Goolsbee), while one voted for a half a point cut (Governor Miran).

The median projection holds that there will be just one 25 basis point cut in 2026, with language returning that insinuates that it could be a while until the next cut. In addition, the Fed says it will begin purchasing shorter-term Treasury bills on Dec. 12.

A press conference will follow at 30 after the hour. In response to the decision, the Dow(+0.65%), S&P 500(+0.29%), and Nasdaq(-0.04%) have jumped from their earlier trading levels. A sagging Russell 2000(+0.85%), which dipped into the announcement, also jumped. The 30YTreasuryfell 1.52 bips to 4.7928%.

Update: 12:41 p.m. ET

Midday Movers

The Federal Reserve's third consecutive rate cut of the year -- and its final of 2025 -- is likely just an hour and a half away.

In response, the market has bifurcated. With traders widely expecting the cut, the  Russell 2000 (+0.22%) is continuing its recent winning streak today. Yesterday, it set a new intraday high, closing narrowly below the levels required to notch a record close. Today might be a different story, assuming traders can accept the central bank's positioning heading into 2026.

By contrast, the  S&P 500 (+0.02%) is roughly flat, while the  Nasdaq (-0.30%) is facing declines as the decision weighs on tech. The Dow(+0.35%) is leading among benchmarks today, thanks to some help from consumer discretionary names and financials, which are offsetting the tech names.

You can see this trend playing out outside of the Dow as well; in the Russell 2000, financials and consumer cyclical names are really standing out today. Check out the heat map:

In total, 57% (3,166) issues are advancing, against 40.1% (2,224) in decline. Zooming in and looking at stocks with at least a $2 billion market cap , we can get some color for the biggest stories in those thousands -- our midday mover list seeks to do that by capturing a snapshot of the top and bottom 20 stocks. Here they are for today:

Winners

At the top of the market is Photronics(+37%, strong earnings). It's joined by Warby Parker(+17.5%, news of Google AI glasses partnership), Braze(+15.3%, strong earnings), and GE Vernova(+13.6%, boosted 2026 outlook at Investor Event).

Outside of the top three, the big trend today seems to be space: Firefly Aerospace(+8.1%), EchoStar(+6.8%), and Rocket Lab(+6.1%) are all higher amid renewed chatter by AI giants to put data centers in space.

Losers

On the other end of the market, drone maker AeroVironment(-10.3%) is declining after cutting its outlook in its quarterly earnings. It's followed in quick succession by Dutch insurer Aegon(-9.7%, plans to relocate to the U.S. and rebrand), Anbio Biotechnology(-8.9%, repeat member; volatility ), and Uranium Energy Corp(-8.4%, poor earnings erased recent rally).

In notable names declining today: Lyft(-7.8%) is falling in sympathy with Uber(-6.1%), which was IDed as a possible "AI Loser" in a report published by Wedbush yesterday. Another name in that report, Maplebear(-6.8%), is also on our decliners list today. The company also named Adobe, Intel, and Pinterestas possible losers.

Update: 9:34 a.m. ET

Opening Bell

The U.S. markets are now open. The Dow(-0.05%) and S&P 500(-0.09%) are down just a few basis points this morning, while the Russell 2000(-0.13%) and Nasdaq(-0.30%) are seeing slightly deeper losses as traders await the fruits of the Fed's highly anticipated policy meeting.

At the same time, the Cboe Volatility Indexis heading a little higher this morning, up 3% to 17.43. That's not a notable level, but worth watching as it's over a week high for the index.

Aside from the Fed's big decision, there's a bunch of news to digest this morning. Here are some of the highlights:

Rate Cut On Deck

Much attention will be paid to the Fed's expected trajectory going forward, as well as possible interventions to stabilize the market.

If today's widely-expected rate cut comes to pass as expected -- per CME FedWatch, nearly 90% odds are put on a quarter-point cut as of this afternoon -- then it'll be the central bank's third straight cut, building on cuts in September and October. It'll bring the target rate to between 3.50% and 3.75%.

It's also likely to be the last cut we see for the Fed for at least the next few months, with traders leaning towards just two or three rate cuts in 2026. Mind you, that's with the knowledge that Fed Chair Jerome Powell will soon be replaced by a chair more amenable to this administration's goals of cutting rates.

Meta To Direct Attention Away From Open Source AI

Tech giant Metamade itself an early contender in AI with models like LLaMA, but the firm's days as an open source hero might be numbered as it focuses 'money-making' models.

After spending billions on acquiring talent from competitors and billions more on infrastructure, the company has blown through its cash position -- and Bloomberg and NYT report that CEO Mark Zuckerberg is focusing its new AI model, Avocado, over open source alternatives.

The reports come days after a report said the company would pale back its investment in its beleaguered VR investments, which were capped by a report today that the company would increase prices on its virtual reality devices next year as well.

Update: 8:04 a.m. ET

A.M Update: Cut O'Clock

Good morning. Today is the day that traders have been waiting for: the day of the Fed's interest rate decision. However, aside from that, the market has a few other possible revelations in store for us today -- namely on the AI front -- as tech giant Oracleis set to report.

Here's what is on deck for today, aside from the obvious:

Earnings Today: Oracle, Adobe, Synopsys

Per Nasdaq, there's over 30 reports slated for today. Among them will be Oracle, Adobe, and Synopsys-- all of them offering unique perspectives on the state of the AI boom.

Here are the reports that are from firms with at least $1 billion:

Economic Data + Events: Fed Time

As most already know, the Fed is slated to announce its interest rate decision around 2 p.m. ET , just before the market close. However, between now and then, we've got a long list of economic data and reports to work through.

Here's what is on deck (in UTC-5), per TradingEconomics:

This story was originally published by TheStreet on Dec 10, 2025, where it first appeared in the Latest Business & Market News section. Add TheStreet as a Preferred Source by clicking here.