MORNING BID AMERICAS-A delicate balancing act

By Samuel Indyk

LONDON, Sept 24 (Reuters) - What matters in U.S. and global markets today

By Samuel Indyk, Equities Reporter, Finance and Markets Breaking News, EMEA

Wall Street snapped a three-day streak of record closes as Federal Reserve Chair Jerome Powell struck a measured tone on future rate cuts, balancing inflation risks with a weakening labor market. His remarks, which offered little clarity on the timing of further easing, triggered a broad pullback in equities, particularly in tech. Asian markets rebounded overnight, led by Chinese AI enthusiasm, while U.S. futures edged higher, suggesting a tentative rebound.

* Powell reiterated the Fed's delicate balancing act between inflation and employment, calling the policy outlook “a challenging situation”. While he left the door open for more rate cuts, he gave no timeline, and notably described equities as “fairly highly valued”. Traders are still pricing in about a 95% chance of a rate cut at the October meeting.

* The Nasdaq fell nearly 1% as Nvidia dropped 2.8%, reversing gains from its OpenAI investment announcement. Amazon, Microsoft, and Apple also declined. The S&P 500 lost 0.6%, its biggest one-day drop in three weeks, while the Dow slipped 0.2%.

* Meanwhile, Boeing shares rose 2% after securing an $8 billion order from Uzbekistan Airways, helping cushion the Dow’s decline. Micron rose after hours on upbeat earnings and guidance.

* Asian stocks rebounded on Wednesday, with Hong Kong’s STAR 50 Index up 3.6%, led by a 9% rise in Alibaba after it unveiled its largest AI model. European shares are a touch softer.

Today's Market Minute

* In a rhetorical shift, U.S. President Donald Trump said he believed Ukraine could retake all its land occupied by Russia on Tuesday, in a social media post following a combative, wide-ranging speech to the U.N. General Assembly that leveled scathing criticism of world leaders.

* Trump on Tuesday also scrapped a meeting with top congressional Democratic leaders to discuss government funding, raising the risk of a partial government shutdown beginning next week.

* The consensus among economists is that Trump's tariff burden has so far been shouldered by U.S. companies and that consumers have got off relatively lightly, although, writes ROI markets columnist Jamie McGeever, these scales are widely expected to tip the other way in the coming months.

* OpenAI, Oracle and SoftBank <9984.T> on Tuesday announced plans for five new artificial intelligence data centers in the United States to build out their ambitious Stargate project.

* Jimmy Kimmel returned to U.S. late-night television on Tuesday defending political satire against Trump administration "bullying", six days after his on-air remarks about the murder of right-wing activist Charlie Kirk led Walt Disney to suspend his show.

* The looming revival of international sanctions on Iran is unlikely to curtail Tehran’s vital oil exports but could benefit Chinese refiners, offering them access to a larger share of discounted Iranian crude. Read the latest from ROI energy columnist Ron Bousso.

Chart of the day

While much has been made of the performance of the so-called "Magnificent 7" since 2022, European defense stocks have had an even more impressive rally, led by an almost 2,000% rise in Europe's biggest ammunition maker Rheinmetall. Europe's index of aerospace and defense companies has risen threefold since Russia's invasion of Ukraine.

Suppliers of jets, tanks and shells tend to do well when there are ongoing conflicts. And while Trump on Tuesday asserted that he had already ended seven wars since becoming president for the second time, the war in Ukraine remains a trickier puzzle to solve.

Today's events to watch

• U.S. New Home Sales (10:00 AM EDT)

• U.S. Treasury to sell 5-year notes and 2-year floating rate notes (1:00 PM EDT)

• Fed Governor Michael Barr speech on bank stress testing (1:00 PM EDT)

• Senior Credit Officer Opinion Survey release (2:00 PM EDT)

• H.4.1 Reserve Balances report (4:30 PM EDT)

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