Interest Rate Cuts and Company Acquisitions: What Should Investors Expect?

Highlighted Interest Rate Decisions and Their Impact on Markets

A week full of excitement is being experienced in the stock market. The US Federal Reserve (Fed) lowered its policy interest rate by 25 basis points on Wednesday to a range of 3.50% - 3.75%. This reduction is notable as it marks the third 25 basis point cut made throughout 2025. The Fed's decision sends mixed messages to investors. While the median forecast for the end of 2025 remains steady at 3.625%, the expectation of only an additional 25 basis point cut in 2026 and 2027 indicates that the Fed has not yet shifted to a loosening mode.

Interest Rate Cuts in Turkey and Stock Performance

Domestically, the BIST 100 Index continues to trade positively alongside the Central Bank of Turkey's (TCMB) interest rate decisions. On Thursday, the TCMB reduced the interest rate by 150 basis points to 38%. This decision is noted to have a neutral effect on the stock market. However, the statements in the TCMB's decision text provide clues that the monetary policy stance may be tightened. The BIST 100 index is preparing to close the week with a 3.5% increase.

Company Announcements and Competitive Environment

In the US, Paramount Skydance has presented a rival bid after Netflix's acquisition of Warner Bros Discovery. Paramount has offered a cash bid of $30 per share to WBD shareholders. Additionally, Pegasus has completed the acquisition of 100% of the Czechia-based Smartwings for a price of €154 million. This period sees many companies taking strategic growth steps, attracting investor interest.

Major Investments and Collaborations

On the other hand, significant collaborations are also catching attention. Major tech giant Nvidia is expected to see other major players similarly enter the market following US President Donald Trump's approval of GPU sales to China. For example, Disney has partnered with OpenAI in a deal worth $1 billion. Furthermore, NextEra Energy is strengthening its projects in the energy and technology sectors through a new collaboration with Google Cloud.

Market Trends and Recommendations

This week, analysts have highlighted AI-focused companies and dividend aristocrats among their favorite stocks. Names like Adobe, Nvidia, and Meta Platforms stand out in Citi's list, while Wolfe Research recommends companies with high dividend yields, like Walmart and Aflac, to investors. For investors in Turkey, JPMorgan's new target prices for Migros, Bim, and Turkish Airlines may influence their investment decisions.