Global stock markets dipped on Wednesday after briefly hitting record highs in response to the Fed’s quarter-point rate cut
Global stock markets were trading mixed on Thursday following the Federal Reserve’s first rate cut of the year, as investors grappled with uncertainty over the pace of future policy easing.
Some markets showed signs of resilience, with U.S. equity futures rising 0.4 percent following a mixed session on Wall Street overnight. S&P 500 futures were up 0.48 percent as of 5:31 GMT, while Nasdaq futures gained 0.74 percent.
Asian shares rise following rate cut
In the Asian stock market, South Korea’s KOSPI gained 1.25 percent, the Taiwan Weighted Index was up 1.11 percent, and Japan’s Nikkei 225 added 1.41 percent
However, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.27 percent, weighed down by losses in Australian and New Zealand markets, while Chinese equities fluctuated between gains and losses.
Global stock markets dipped on Wednesday after briefly hitting record highs in response to the Fed’s quarter-point rate cut and signals of a gradual reduction in borrowing costs for the remainder of the year. However, Fed Chair Jerome Powell tempered expectations for aggressive easing in post-meeting remarks, describing Wednesday’s action as a risk-management cut and noting that the central bank does not need to move quickly on interest rates.
European markets mixed
European stock markets were mixed on Thursday, with the STOXX Europe 600 index falling a marginal 0.029 percent and France’s CAC 40 dipping 0.40 percent. However, Germany’s DAX gained 0.13 percent and the FTSE 100 Index rose 0.14 percent.
Currency markets also showed mixed movements. The U.S. dollar fell to its lowest level since February 2022, hitting 96.224 against a basket of major currencies immediately after the Fed’s rate decision, before rebounding 0.29 percent on Thursday to 97.15. Meanwhile, the euro remained steady at $1.181 after briefly climbing to a near two-year high of $1.19185 following the announcement.
The Chinese yuan held steady at 7.103 after the People’s Bank of China left the rate on its seven-day reverse repurchase agreements unchanged on Thursday, choosing not to follow the Fed’s move. Sterling slipped 0.1 percent to $1.3621, after briefly touching its highest level since July 2 at $1.3726 on Wednesday.
The Bank of England is set to announce its policy decision later on Thursday, with markets largely expecting rates to remain at 4 percent.
In commodities, spot gold slipped 0.83 percent to $3,657.76 per ounce, after reaching a record $3,707.40 in the previous session. U.S. gold futures for December delivery also slipped 0.66 percent to $3,693.40.
Brent crude futures slipped 7 cents, or 0.10 percent, to $67.88 a barrel as of 4:10 GMT, while U.S. West Texas Intermediate (WTI) futures eased 10 cents, or 0.16 percent, to $63.95.