Asian stocks experienced varied movements on Wednesday despite speculations of a likely interest rate cut by the Federal Reserve, with Australia’s benchmark reaching a new record. U.S. futures dropped, while oil prices saw an increase. In Tokyo, the Nikkei 225 index fell by 0.4% to 41,097.69 after an initial rise. Reports suggested that Japan’s Finance Ministry may have intervened in the currency market, purchasing nearly 6 trillion yen to support the yen. The U.S. dollar weakened against the Japanese yen, dropping to 157.79 yen from 158.34 yen. Australia’s S&P/ASX 200 rose by 0.7% to 8,057.90, hitting an all-time high of 8,083.70. Conversely, South Korea’s Kospi decreased by 0.8% to 2,843.29. Hong Kong’s Hang Seng index increased by 0.2% to 17,761.66, while the Shanghai Composite index declined by 0.3% to 2,967.32.
Taiwan’s Taiex dropped by 1%, with Taiwan Semiconductor Manufacturing Company’s stock falling by 2.4%, while Thailand’s SET gained 0.2%. On Tuesday, the S&P 500 surged by 0.6% to 5,667.20, setting a new all-time high for the 38th time this year. The Dow Jones Industrial Average climbed 1.9% to 40,954.48, while the Nasdaq composite lagged with a 0.2% increase to 18,509.34. Some top performers from the previous day, banking on the expectation of former President Donald Trump’s return to power, saw a drop in their stock prices following reports of an assassination attempt. Trump Media & Technology Group fell by 9.1% after a 31.4% increase. Bonds also saw reversals in previous trends, with longer-term yields dropping more than shorter-term yields. The yield on the 10-year Treasury decreased to 4.16% from 4.23%, a significant change from April’s 4.70%, providing support for stock prices.
There is a growing belief that Federal Reserve might start reducing interest rates soon due to expectations of slowing inflation. Despite strong retail sales data on Tuesday, indicating robust economic activity, traders forecast a 100% chance of an interest rate cut in September by the Fed, up from 70% a month earlier. The balancing act for the Federal Reserve remains delicate, as they aim to adjust the economy by easing high-interest rates at an appropriate time. The bond market and stock prices are reacting to these expectations. Additionally, U.S. benchmark crude oil prices increased slightly to $79.72 per barrel, while the international standard Brent crude dropped to $83.65 per barrel. The euro also saw an increase, rising to $1.0912 from $1.0898.
