Asian stock markets displayed a mixed performance following the Federal Reserve’s recent interest rate cut, which saw the U.S. stock market nearing its record highs. In the wake of this announcement, U.S. futures experienced a decline while oil prices remained relatively stable.
The Fed’s decision to lower its key interest rate was largely anticipated. However, comments from Fed Chair Jerome Powell ignited speculation about potential further cuts in 2026. Investors reacted cautiously, particularly after Oracle’s disappointing earnings report. The tech giant’s shares plummeted by 11.5% in after-hours trading, raising concerns over its capital flow in light of substantial investments in artificial intelligence.
In Japan, the Nikkei 225 index fell by 1% to 50,087.11, affected notably by a 6.8% drop in shares of SoftBank Group Corp., a key player in the tech investment sphere. Local sentiment weakened further as expectations mounted regarding an interest rate increase from the Bank of Japan during its upcoming meeting.
Meanwhile, Hong Kong’s Hang Seng index managed a slight increase of 0.1% to 25,564.87 after the Hong Kong Monetary Authority followed the Fed’s lead by reducing borrowing costs to their lowest level since October 2022. In contrast, the Shanghai Composite index saw a decrease of 0.5% to 3,882.72, with market sentiment remaining cautious ahead of China’s forthcoming credit data. Recent reports indicated a significant decline in new yuan loans for October, falling short of forecasts and highlighting a slowdown in consumer demand.
In Australia, the S&P/ASX 200 added 0.2% to reach 8,596.40, breaking a three-day losing streak, bolstered by strength in gold and mining stocks. The country’s unemployment rate for November held steady at 4.3%, lower than analysts’ expectations of 4.4%.
Conversely, South Korea’s Kospi index slipped by 0.3% to 4,121.68, and Taiwan’s Taiex index fell by 1.3%. India’s BSE Sensex showed a slight uptick amidst the mixed sentiments across Asia.
On the U.S. front, the S&P 500 rose by 0.7% to 6,886.68, coming close to its all-time high from October. The Dow Jones Industrial Average surged by 1% to 48,057.75, while the Nasdaq composite climbed 0.3% to 23,654.16. Lower interest rates generally resonate positively with Wall Street as they tend to stimulate economic growth and improve investment valuations, albeit with a caveat of potential inflationary pressures.
The Fed’s rate cut alone did not significantly sway markets, but Powell’s remarks, which appeared to leave the door open for future cuts, reassured some investors. He noted the Fed’s delicate position, where addressing one aspect, like slowing job growth, may exacerbate the other, such as rising inflation.
In addition to market shifts, GE Vernova saw a notable increase, rising 15.6% after the energy firm revised its revenue forecast and announced a dividend doubling along with a stock buyback program. Other gainers included Palantir Technologies and Cracker Barrel Old Country Store, up by 3.3% and 3.5% respectively.
In early trading on Thursday, U.S. benchmark crude oil prices dipped slightly, settling at $58.40 per barrel, while Brent crude came down to $62.14 per barrel. The U.S. dollar weakened against the Japanese yen, trading at 155.90 yen compared to the previous day’s 156.02, and the euro also saw a decrease against the dollar, sitting at $1.1688 from $1.1696.
