HONG KONG — European stock markets began the day positively following a mixed trading period in Asia, all while investors await the Federal Reserve’s final interest rate decision of the year.
Futures indicated a 0.2% increase for both the S&P 500 and the Dow Jones Industrial Average.
As markets opened, France’s CAC 40 experienced a modest rise of 0.1%, reaching 7,373.03, and Germany’s DAX climbed 0.2% to 20,285.04. In Britain, the FTSE 100 also saw a 0.2% increase, climbing to 8,211.66, buoyed by the news that inflation in November nudged up to 2.6% for a consecutive month.
The Bank of England is predicted to maintain its key interest rate at its upcoming Thursday meeting, a stance expected to be mirrored by the Bank of Japan, which concludes its policy discussions on Friday.
Meanwhile, Japan’s Nikkei 225 index dipped 0.7% to 39,081.71 after the government disclosed that exports had risen by 3.8% compared to the previous November, while imports had decreased by 3.8%, according to figures from the Ministry of Finance.
In major corporate news, shares of Nissan Motor Corp. surged 23.7% following reports of ongoing discussions about a potential closer alliance with Honda Motor Co., despite no merger agreement being reached. In contrast, Honda’s shares slid by 3%.
Earlier in August, Nissan, Honda, and Mitsubishi Motors Corp., a partner in the Nissan alliance, had committed to sharing components for electric vehicles—including batteries—and jointly undertaking research on autonomous driving technologies in response to substantial changes in the automotive sector.
In Hong Kong, the Hang Seng index gained 0.8%, reaching 19,864.55, while the Shanghai Composite index increased by 0.6% to 3,382.21.
South Korea’s Kospi index surged by 1.1% to 2,484.43, whereas Australia’s S&P/ASX 200 experienced a slight dip of 0.1%, landing at 8,309.40.
On the previous Tuesday, the S&P 500 fell by 0.4%, and the Dow Jones dropped by 0.6%. The Nasdaq composite dipped 0.3% from its record high achieved just a day earlier.
Overall, the S&P 500 is poised for one of its strongest annual performances since 2000, with an increase approaching 27%. This resilience in the U.S. economy, coupled with optimistic expectations for President-elect Donald Trump’s policies—anticipated to foster growth without excessively inflating prices—has influenced market sentiment. Additionally, the Federal Reserve has commenced easing by reducing interest rates from previously high levels not seen in two decades.
The Fed is widely expected to announce a third rate cut of the year during Wednesday’s meeting, where officials will also provide insights on future interest rate projections. However, expectations for further rate reductions have started to wane as inflation indicators suggest it may persist above the Fed’s 2% target, albeit having sharply decreased from its peak exceeding 9%.
Recent data revealed that U.S. retail sales outperformed economists’ forecasts, potentially signaling an economy that may not require further assistance through lowered interest rates. While cheaper borrowing costs can stimulate economic activity, they may also inadvertently drive inflation higher.
In cryptocurrency news, Bitcoin reached a record high exceeding $108,000 on Tuesday before retreating, according to reports from CoinDesk.com. The cryptocurrency has surged from around $44,000 at the start of the year, riding the wave of optimism regarding potentially more favorable regulatory conditions under Trump’s administration. By late Wednesday, Bitcoin was trading at $104,304.
In commodity markets early Wednesday, U.S. benchmark crude oil edged up by 54 cents to $70.19 per barrel, while Brent crude, the global standard, saw an increase of 53 cents, reaching $73.72 per barrel.
The U.S. dollar appreciated, trading at 153.71 Japanese yen compared to the earlier 153.50 yen. Meanwhile, the euro slightly strengthened against the U.S. dollar, moving to $1.0493 from $1.0491.
