CNBC Business News Update - Market Close: Stocks Lower, Fed Cuts Interest Rates By Half Percent, Boeing Starts Furloughs 9/18/24

Episode Date: September 18, 2024

From Wall Street to Main Street, the latest on the markets and what it means for your money. Updated regularly on weekdays, featuring CNBC expert analysis and sound from top business newsmakers. Anchored by CNBC's Jessica Ettinger.

I'm Jessica Edinger, CNBC. Wall Street opens Thursday morning after the Fed cut interest rates by a half percent, bigger cut than many thought would happen. The Dow and the S&P 500 index touched fresh record highs after the announcement before pulling back. The Dow was down 103 points, a quarter percent. The S&P 500 index down 16 points and the NASDAQ was down 54 points. The Federal Reserve has a double mandate, maximum employment for Americans and low inflation. And

after raising interest rates to cool the economy and lower inflation, which has fallen dramatically, the Fed chair says now it's time to cut those rates to make sure business can keep borrowing to keep hiring. We had a historically tight labor market, historically tight. There was a severe labor shortage. The risks were on inflation. You know, that said to us, concentrate on inflation, concentrate on inflation. And we did.

Part of bringing down inflation, though, is cooling off the economy and a little bit cooling off the labor market. You now have a cooler labor market in part because of our activities. So what that tells you is it's time to change our stance. So we've made a good, strong start on that. Fed Chair Jay Powell, even with the half percentage point cut, more cuts are believed to be on the way. We have made immense progress on inflation. And that's a real victory.

And the federal funds rate is still very elevated. New Century's Claudia Somm on CNBC. When interest rates come down, it costs less to borrow money for businesses and for consumers. Americans will pay less on adjustable rate loans like credit cards and adjustable rate mortgages. Boeing starting to furlough a large number of employees as the machinist strike continues. The company froze hiring earlier this week to save money. Alaska Airlines was cleared to buy Hawaiian Airlines by the Department of Transportation. And Alaska's CEO Ben Minicucci told CNBC why the planes will still fly under their original names. This is fantastic for people who live in Hawaii, for people that live on the West Coast. It makes Alaska more competitive with the acquisition of

wide-body airplanes. Both the Alaska brand and the Hawaiian brand have so much history, over 90 years of history and culture. So traditionally, when you do a merger, you bring it all into one brand. We thought this was the best approach to use a dual-brand approach because they are special. The name Alaska and the name Hawaiian means so much. Alaska CEO Ben Minicucci on CNBC. Ozempic could get cheaper for Medicare recipients. Ozempic is very likely to be one of the drugs targeted for a price cut in bargaining with the U.S. government's Medicare program. That's according to comments from a senior executive from Novo Nordisk. The Inflation Reduction Act allows the U.S. to directly negotiate drug prices with manufacturers. In the first round of bargaining earlier this year,

it slashed the cost of 10 of the world's biggest medicines by anywhere from 38 to 79 percent for 2026. And the next 15 drugs targeted for negotiations are expected to be named by early next year. CNBC's Joe Kernan. On Thursday's watch list, we get earnings from Olive Garden parent Darden Restaurants, Cracker Barrel, Home Builder Lenar, and FedEx. We find out how many people applied for unemployment benefits last week. We get existing home sales numbers for August. The lockup expires and former President Trump will be allowed to sell his shares of Trump Media. The Penguin premieres on Max and HBO as a Batman spinoff series Thursday night. Jessica Ettinger, CNBC. The Investing Club. We're not about trading. We're about investing.

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