U.S. stocks reacted positively following the Federal Open Market Committee's announcement in mid-September that it would lower interest rates by 50 basis points, wider than many analysts had anticipated. Generally, a lower federal funds rate is often a boon for stocks, as businesses are able to more easily secure loans to facilitate growth and consumers may be more likely to increase spending habits.
The Federal Reserve is not the only central bank that has reduced interest rates heading into the final quarter of 2024. Similar institutions in Canada, the U.K., and other countries have begun to trim rates in recent months as well. Notably, the European Central Bank—the equivalent of the Federal Reserve for the European Union—cut some interest rates by 25 basis points in June and both deposit facility and refinancing rates in September as well. European stocks may stand to benefit from lower interest rates in the eurozone and, potentially, the U.S. as well.
IFNNY: Technological Breakthrough and Value Prospect
Infineon Technologies AG (OTC: IFNNF) is a German fabricator of semiconductors and related products. With a market capitalization of under $45 billion, it is orders of magnitude smaller than major semiconductor rivals like NVIDIA Corp. or Broadcom Inc. (NASDAQ: AVGO). Smaller companies often stand to benefit in particular from lowered interest rates as they may be ...
