Materials unchanged amid Fed concerns – Materials review

Producers of metals and other commodities were roughly unchanged on concerns about the Federal Reserve’s decision.

Derivatives markets were giving two to three chances of a 50 basis point rate cut, a slightly higher probability than a day earlier.

In forecast markets, it was difficult to decide whether there would be a big cut or a more conventional quarter-percentage-point cut.

Gold futures, which had surged to record prices on expectations of a 50 basis point rate cut, fell.

Precious metals futures have been among the assets with the biggest gains this year.

“If the Fed does decide to cut rates by 50 basis points, cyclical sectors like copper, industrials and small-caps could continue to rally,” said Scott Helfstein, head of investment strategy at fund manager Global X.

“Markets may be a little disappointed with the 25 basis point cut, which could signal a new spike in volatility.”

Nucor warned of a big year-over-year decline in profit, citing lower steel prices and weaker demand from manufacturing customers.

Similarly, Nucor rival Steel Dynamics warned that profits from its steel business were “significantly lower” than in the previous quarter due to weak demand and lower steel prices.

Write to Rob Curran at [email protected]

(END) Dow Jones Newswires

September 17, 2024, 5:09 PM ET (9:09 PM GMT)