On Wednesday, the Federal Reserve delivered its second consecutive rate cut amid economic uncertainty, President Donald Trump finalized a landmark trade deal with South Korea, General Motors announced sweeping EV layoffs, and Nvidia became the first company in history to hit a $5 trillion market valuation.
Fed cuts rates, ends QT program
The Federal Reserve approved its second straight interest rate cut on Wednesday, lowering the benchmark federal funds rate by 25 basis points to a range of 3.75%–4%.
The decision, supported by a 10–2 vote, came despite limited economic visibility due to the ongoing government shutdown, which has suspended key data releases such as nonfarm payrolls and retail sales.
The Fed also announced plans to end its quantitative tightening (QT) program on December 1, halting the balance sheet reduction process that has already shrunk holdings by $2.3 trillion since 2022.
Governor Stephen Miran dissented in favor of a larger half-point cut, while Kansas City Fed President Jeffrey Schmid opposed any reduction, citing persistent inflation and economic strength.
Chair Jerome Powell said the economic outlook “has not changed much since September,” despite delayed federal data, and cautioned that another rate cut in December “is not a foregone conclusion.”
US–South Korea trade deal secures $350 Billion investment commitment
The United States and South Korea finalized the key details of a long-awaited trade agreement during a meeting between Presidents Donald Trump and Lee Jae Myung at the APEC Summit in Gyeongju.
The deal reduces tariffs on South Korean automobiles from 25% to 15%, matching Japan’s rate, and includes tariff adjustments on semiconductors to boost competitiveness against Taiwan.
A major highlight is $350 billion in South Korean investments in the US economy — $200 billion in cash and $150 billion through shipbuilding cooperation.
Investments will be capped at $20 billion annually to protect South Korea’s foreign exchange stability.
Trump hailed the agreement as “pretty much finalized,” calling discussions “determined and tremendous.”
Ceremonial diplomacy also marked the event, as President Lee awarded Trump South Korea’s Grand Order of Mugunghwa.
GM cuts 5,500 jobs as EV market weakens after tax credit removal
General Motors Co. is laying off approximately 5,500 workers across its US electric vehicle and battery plants as it scales back production amid slowing demand.
The largest impact is at Detroit’s Factory Zero, which builds the Chevrolet Silverado EV, GMC Sierra EV, and Hummer EV.
Of the 3,400 furloughed workers, 1,200 will return in January on a single shift, while 2,200 remain indefinitely laid off.
Additional layoffs include 1,400 workers in Warren, Ohio, and 710 in Spring Hill, Tennessee.
GM spokesperson Kevin Kelly said most of the Tennessee layoffs are temporary, while some Ohio employees could return in May.
The retrenchment follows the elimination of federal EV tax credits in September, which sharply reduced consumer affordability.
GM took a $1.6 billion charge in Q3 and expects more write-downs as it reevaluates its $35 billion EV investment strategy.
Nvidia hits $5 Trillion valuation as AI investment surges
Nvidia (NASDAQ: NVDA) surged nearly 3% on Wednesday, becoming the first company in history to reach a $5 trillion market capitalization.
The milestone followed CEO Jensen Huang’s announcement of $500 billion in AI chip bookings and plans to build seven new supercomputers for the US Department of Energy, powered by over 100,000 Blackwell GPUs.
Nvidia now accounts for over 7% of the S&P 500, underscoring its dominance in the global semiconductor industry.
The broader AI spending boom is driving record demand, with Microsoft, Amazon, Google, and Meta expected to invest up to $360 billion in AI infrastructure in 2025 — solidifying Nvidia’s leadership in the ongoing AI arms race.
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