What's moving markets today: July 31, 2019

Stocks fell on Wednesday after Federal Reserve chairman Jerome Powell suggested that the central bank may not cut rates as aggressively as Wall Street hoped.

The Dow fell 334 points, or 1.2%. The S&P and Nasdaq each ended the day with losses of more than 1%.

Apple (AAPL) was one of only four Dow stocks to end Wednesday with gains, rising more than 2% after reporting earnings that topped forecasts despite a further slowdown in iPhone sales.

Shares of JPMorgan Chase (JPM) also rose. It and other financial stocks could benefit from fewer Fed rate cuts since lower rates eat into profits on bank loans.

The market took the mere quarter-point rate cut from the Federal Reserve in stride -- at first. But once Fed chair Jerome Powell suggested that Wednesday's move was not the start of a series of rate cuts, stocks took a turn for the worse.

At one point, the Dow was down more than 400 points in late afternoon trading. And it looks like comments from Powell during the press conference were the catalyst for the sell-off.

Powell strongly suggested that the Fed was not about to start a long series of rate cuts as some had hoped. Today's rate cut could be a one and done move.

"We are thinking of it as a mid-cycle adjustment to policy," Powell said.

Translation: The Fed is waiting to see what happens next with the economy. If the job market remains relatively strong -- or if the US and China end their trade war -- then more rate cuts may not be needed.

The Federal Reserve did just what the market expected -- and Wall Street mostly shrugged.

Stocks were flat just before the Fed lowered rates by a quarter-point...the first rate cut since 2008...and they remained largely unchanged after the announcement.

Of course, there could be some market fireworks once Fed chair Jerome Powell explains the decision in more detail at a press conference later Wednesday afternoon.

But so far, it looks like investors are okay with the fact that the Fed did not get more aggressive and slash rates by a half of a percentage point. Heck, Wall Street didn't even seem to mind that two Fed members voted to keep rates unchanged -- a hawkish sign.

The Federal Reserve on Wednesday lowered interest rates for the first time since the Great Recession in 2008 to help stave off the possibility of an economic downturn.

Policymakers led by Fed Chairman Jerome Powell voted in favor of a small cut in the federal funds rates, keeping their promise to "act as appropriate" to sustain the country's longest economic expansion in history.

Interest rates, which affect the cost of borrowing for credit cards and mortgages, are now set to hover between 2% and 2.25%.

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Match.com, Tinder, Angie's List and Vimeo are all owned by IAC. Does the conglomerate model still have legs?

Glenn Schiffman, chief financial officer of IAC, told CNN Business anchor Richard Quest on the "Markets Now" live show that it does.

Schiffman said IAC (IAC) tries to bring in a dozen to two dozen candidates for acquisition a year. The proof, he says, is in the bottom line: The company grew adjusted earnings by 70% last year.

The broadest measure of America's money supply is growing, but not as fast as it should, Steve Hanke, economics professor at Johns Hopkins told CNN Business anchor Richard Quest on the "Markets Now" live show. That's why the Fed has to cut rates.

"It's the money supply stupid," he said. "That's what we've gotta keep our eye on: the money supply."

By loosening its monetary policy, the Fed could grow America's supply of money by 5% or 6% annually (it's on a 4%ish pace now). That extra cushion could give debt-laden federal government and companies some relief if the economy falters.

Okay, the Fed is cutting rates. That's 100% guaranteed, according to a measure of Wall Street sentiment.

"It would be a mild to major surprise if we did not get a quarter [point cut] today," Matthew Cheslock, broker at Virtu Americas told CNN Business anchor Richard Quest on the "Markets Now" live show.

Why is it such a certainty? The Fed knows the markets priced in a cut, and it's terrified of freaking out the market.

Once the Federal Reserve lowers interest rates, will that give average Americans some financial relief? Perhaps. But a lot will depend on how much lower rates go from here.

The Fed is widely expected to cut interest rates Wednesday. As a result, longer-term US Treasury yields -- such as the 10-year -- have already come down sharply this year. They started 2019 around 2.66% and currently sit at about 2.06%.

The 10-year is closely watched because it impacts rates for several kinds of consumer loans, most notably mortgages. And as the 10-year has fallen, so have mortgage rates.

The average national rate for a 30-year fixed mortgage now stands at 3.75%, according to Freddie Mac. That's down from 4.5% at the beginning of the year.

Fed rate cuts could also lower rates for credit card debt, home equity lines of credit and auto loans. That's all good news.

But there's one big problem that is a direct result of lower rates.

Lower rates punish savers. That's because rate cuts allow banks to reduce the amount of interest they pay to hold your deposits. According to the FDIC, the average bank savings account yields a paltry 0.09%. A checking account is even worse, paying just 0.06%. And it's not much better for money market accounts. They yield a puny 0.18%.

Those rates will likely head even lower if the Fed starts a series of rate cuts. Again, that would be great news for people with a lot of debt. But for those trying to save money? Not so much.

It's no secret that the Federal Reserve will cut rates Wednesday. But even after it does, bond yields in the United States will remain much higher than most other parts of the developed world.

Forty-three percent of investment grade bonds around the globe (excluding the United States) are trading at a negative yield, according to Deutsche Bank Securities chief economist and managing director Torsten Sløk. That's up from 20% just a few months ago.

Deutsche Bank is painfully aware of how low interest rates are. As CNN Business' Matt Egan points out, negative rates in Europe are one of the main reasons why the firm is struggling. That's unlikely to change anytime soon either.

Outgoing European Central Bank chief Mario Draghi recently suggested that the ECB's various interest rates, which range from 0 to -0.4%, could go even lower in the coming months.

That means investors may continue to pile into US Treasuries no matter how many times the Fed cuts rates. Yields will still be higher than just about everywhere else -- as President Trump often likes to point out on Twitter.