Global Markets Surge as Fed Cuts Interest Rates
Asian Equities Rally on Federal Reserve’s Decision
Stocks, bonds, and commodities across the globe experienced a significant boost on Friday, following the Federal Reserve’s decision to cut interest rates. The move sparked a rally in Asian equities, with Australian and Japanese shares advancing, along with Hong Kong futures. The Golden Dragon index of US-listed Chinese companies surged 3.5%.
US Markets Reach New Heights
The S&P 500 gained 0.7%, setting a fresh peak for the second consecutive day, while the Nasdaq 100 climbed 1.5%. An index of global equities also reached a record high. Treasuries were little changed in Asia, following a rally on Thursday when the Fed lowered its benchmark by 25 basis points.
Fed Chair Jerome Powell’s Comments Boost Market Confidence
Comments from Fed Chair Jerome Powell helped to fuel the cross-asset rally. Powell emphasized the strength of the US economy and hinted that a December rate cut is possible. He also reassured investors that the election would have no impact on policy in the near term and that he would not step aside if asked by Trump.
Dollar Slides, Yen Drifts Lower
The Bloomberg dollar index slid 0.8% on Thursday, its worst day since August, as the greenback trimmed its post-election gains. The yen drifted lower on Friday, after rallying 1.1% the previous day.
China in Focus
Investors are now shifting their attention to China, where a legislative meeting is expected to result in new stimulus measures. Despite tariff threats from the US, optimism is high that Chinese authorities will announce measures to offset the impact of potential trade levies.
Asian Markets React
In other Asian markets, Japanese automaker Nissan Motor Co. announced plans to dismiss 9,000 workers and cut a fifth of its manufacturing capacity after net income plummeted 94%. South Korea vowed to bolster its monitoring of financial markets and respond actively to ease any excessive volatility.
Market Moves
Some of the main moves in markets include:
- Stocks: S&P 500 futures were little changed, while Hang Seng futures rose 1.1% and Japan’s Topix rose 0.6%.
- Currencies: The Bloomberg Dollar Spot Index was little changed, while the euro fell 0.1% and the Japanese yen fell 0.2%.
- Bonds: The yield on 10-year Treasuries was little changed at 4.33%, while Japan’s 10-year yield declined one basis point.
- Commodities: West Texas Intermediate crude fell 0.2%, while spot gold was little changed.
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