Wall Street Dips, European Stocks Rally as U.S Fed Keeps Rates
Global markets were mixed, with Wall Street closing lower, while European bourses rallied as the US Federal Reserve kept rates on hold, albeit with a hawkish tone that could tighten financial conditions for Americans.
While the US Federal Reserve kept rates on hold at yesterday’s policy meeting, a hawkish tilt from committee members dominated global sentiment, pushing Wall Street into the red.
S&P 500 closed 1.21% lower, the NASDAQ gave back 1.34%, and the Dow Jones shed 0.98% after policymakers signalled a possible rate hike later this year amid renewed inflationary concerns.
Europe ended on a firmer note as the FTSE 100 edged up 0.14% and the Euro Stoxx 50 rose 0.68%, supported by falling energy prices amid progress toward an interim agreement between the US and Iran.
The cautious overnight tone on Wall Street reverberated across Asian markets on Thursday as investors mulled higher interest rate expectations and earlier news that US President Donald Trump digitally signed an interim peace deal with Iran to end the war and reopen the Strait of Hormuz.
The Hang Seng Index is currently down 1.70%, and the ASX 200 is trading 0.38% lower, while Japan’s Nikkei 225 is currently up 1.87% on the back of solid gains from semiconductor and AI-related shares.
The Johannesburg Stock Exchange (JSE) is set for a cautious open this morning as prospects for higher interest rates in the United States (US) have shaken up global markets. Global futures and Asia markets are trading in mixed territory this morning, reflective of the angst in the market.
Tencent’s 1.75% decline may weigh on Naspers and Prosus at the open with a weaker move on the ASX 300 Metals and Mining Index (-1.21%) suggesting that local mining counters may also face additional pressure during today’s session – platinum and palladium are under notable strain with gold also falling earlier this morning.
The local bourse saw a volatile start to Wednesday’s trading session but managed a leap higher in late afternoon trade, finishing the session firmly above the line as investors continued to assess global headlines surrounding the Middle East and interest rate expectations as well as a host of local economic releases including inflation and retail sales figures.
The All Share Index and Top 40 Index gained 0.41% and 0.46% to close at 116 025 points and 108 041 points, respectively. Financials (+1.37%) were the best performers, bolstered by banking counters (+1.75%), with Standard Bank (+2.25%) and FirstRand (+2.18%) leading the day.
Resources (+1.03%) maintained momentum from the PGM rally while Industrials (-0.97%) bucked the trend, closing in the red as Naspers and Prosus fell 2.65% and 2.36%, respectively. Global Markets Mixed, AI Stocks Fuel Wall Street Rally
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