US markets choppy as Fed cuts rates

The Dow has ended lower and the S&P 500 finished close to flat after the US Federal Reserve cut interest rates, but Fed Chair Jerome Powell said another rate cut in December is far from assured.

The Nasdaq was higher on Wednesday, boosted by Nvidia which during the session rose past $US5 trillion in market valuation.

After Powell spoke, traders pared bets on a December rate cut, now giving it a 71 per cent chance, down from 90 per cent. In earlier trading, stocks rose and then added to gains after the Fed cut interest rates by a quarter of a percentage point, as expected, and said it will restart limited purchases of Treasury securities.

Fed policymakers also noted the limits in their decision-making process due to the US federal government shutdown. The Fed lowered the overnight benchmark rate to a target range of 3.75 per cent to 4.00 per cent, the second time the US central bank eased this year.

Nvidia first to $US 5 trillion

During the session, chip maker Nvidia became the first company to crack $US5 trillion in market valuation. It has risen more than 50 per cent this year, leading the AI rally on Wall Street.

According to preliminary data, the S&P 500 gained 0.50 points, or 0.01 per cent, to end at 6,891.39 points, while the Nasdaq Composite gained 130.98 points, or 0.58 per cent, to 23,965.74. The Dow Jones Industrial Average fell 62.39 points, or 0.13 per cent, to 47,643.98.

Investors anxiously await results from several megacaps this week, with Meta Platforms, Microsoft and Alphabet all due after the bell.

Earnings have been mostly stronger than expected this reporting period. Of the 222 companies in the S&P 500 that have reported so far, about 85 per cent have posted earnings above analyst expectations, according to data compiled by LSEG as of Wednesday.

Share in industrial machinery maker Caterpillar jumped on a third-quarter profit beat.