Kapital Market Brief | September 18 2025

Top news

·     The Federal Reserve cut its federal funds rate by 25 basis points and could do so once more before the end of the year.

·     The Bank of Canada lowered its funding rate by 25 basis points to 2.5%, in a context of economic weakness and the removal of Canadian tariffs on U.S. products.

·     The Bank of England left interest rates unchanged at 4.0% and reduced the pace of balance sheet reduction from £100 billion to £70 billion.

·     New French Prime Minister Sebastien Lecornu is under pressure to include a 2.0% wealth tax on the top 0.01% of the population in the 2026 budget. Lecornu has until October 7 to submit the budget to Congress.

Economic outlook

The Federal Reserve cut its federal funds rate by 25 basis points and may do so once more before the end of the year. In a split decision—Governor Stephen Ira Miran voted for a 50 basis point cut—the Federal Open Market Committee lowered the funds rate to a range between 4.0% and 4.25%. The decision had been fully priced in by analysts and markets. In its statement, the Committee acknowledged that risks to employment have risen and that the balance of risks under the dual mandate (inflation and employment) has shifted. Powell explained that the rate cut was precautionary and part of a risk-management approach. Additionally, the Fed’s dot plot shows the Committee expects two more rate cuts before year-end, one more in 2026, and another in 2027. However, at the same time the Committee raised its inflation forecast for 2026 and upgraded growth expectations across the horizon. In this sense, we estimate at least one more Fed rate cut before the end of the year.

Markets and stocks

In the U.S., futures of major indexes opened the session with a positive tone, driven by renewed appetite for tech stocks after the Federal Reserve cut its benchmark rate by 25 basis points. Jerome Powell emphasized that the decision reflects a “risk-management” approach amid a cooling labor market. In Europe, the Bank of England kept its rate at 4%, as expected, while equities traded higher. Focus also turned to pharmaceutical and banking sectors, after encouraging clinical trial results from Novo Nordisk and a partial rebound in leading regional banks. Meanwhile, Asian markets closed mixed, with Japan reaching new highs.

In commodities, oil posted a rebound, although signs of oversupply persisted in the U.S. market, with rising distillate inventories. Gold hovered around $3,661 per ounce, after hitting a record on Wednesday.

In fixed income, Treasury yields edged up following jobless claims data that came in below expectations. The 10-year yield stood at 4.10%, while the 2-year yield was at 3.56%.

Grupo Bimbo obtained clearance from Brazil’s Competition Authority to acquire Wickbold, a deal expected to close in the coming weeks. The transaction covers the manufacturing, marketing, and distribution of Wickbold and Seven Boys baked goods portfolios.

Femsa announced the appointment of José Antonio Fernández Garza-Lagüera, current CEO of FEMSA Proximity & Health, as its new Chief Executive Officer, effective November 1, 2025. This move continues the company’s succession plan first outlined in its 4Q24 report.

Corporate news

Nvidia and Intel announced an alliance in which the former will invest $5 billion to co-develop chips for PCs and data centers. Intel will integrate Nvidia’s graphics technology into future processors, while its CPUs will be part of Nvidia’s AI platforms. The agreement builds on prior backing for Intel from SoftBank and the U.S. government.

Tesla is working on a redesign of its door handles after reports of malfunctions that hindered passenger exits during emergencies. The new design aims to unify manual and electronic mechanisms into a single button. The U.S. road safety authority is investigating potential defects in the 2021 Model Y.

China decided to close its antitrust investigation into Google’s Android system.