US stocks edge (^DJI, ^IXIC, ^GSPC) lower after the Federal Reserve cut interest rates by 50 basis points

Edward Jones senior investment strategist Mona Mahajan joins Seana Smith and Josh Lipton on Market Domination Overtime to discuss how investors should be thinking about the Fed's new rate-cutting cycle.

“[Fed Chair]Jerome Powell did a nice job today of implementing the 50-basis-point rate cut” while also “signaling very clearly that he does not think the economy is in any sort of imminent danger of a downturn or recession. In fact, he reiterated a few times that the economy is holding up well. The labor market is in good shape, and this 50-basis-point rate cut is a sign of confidence that inflation is moving much closer to their target,” Mahajan tells the Market Domination Overtime team.

“The data is favorable that we are headed towards what we'd call that 'soft-ish' landing" with some of the economic data points above where the Fed wants them, but “nowhere near negative growth rates,” which is another positive sign.

“Earnings growth is another underlying key factor for both the economy and the markets, frankly,” Mahajan says ahead of the upcoming earnings season.

Looking at the labor market, the strategist says, “We are seeing a cooling, not a collapsing, but it's also been driven by new entrants to the workforce, rather than those layoffs and job cuts that all of us and households across the country may be more worried about. That's a good sign.”

She highlights the major indexes strength year-to-date but notes, “We are, of course, headed towards a choppier period, historically choppier period,” with September and October historically being challenging months for the market as well as the presidential election in November.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

This post was written by Naomi Buchanan.