Asia-Pacific markets exhibited a mixed performance following remarks from U.S. Federal Reserve Chair Jerome Powell, who dampened expectations of a rate cut in December. On Wednesday, the Fed lowered the benchmark federal funds rate by 25 basis points, settling it at a range of 3.75% to 4%, a move that some analysts had anticipated.
Investors across the region are keeping a close eye on an upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping—this marks their first in-person interaction during Trump’s second term. This meeting has considerable implications for global trade dynamics, especially in light of recent tensions between the two economic superpowers.
South Korea’s markets took center stage as Kim Yong-beom, Seoul’s chief policy advisor, disclosed critical aspects of a new trade deal with Washington. Under the terms, South Korea has committed to invest $200 billion in the U.S., with an annual spending cap of $20 billion. Additionally, the remaining $150 billion of South Korea’s total pledge of $350 billion, announced earlier this year, will be allocated toward shipbuilding cooperation. This strategic investment is expected to enhance bilateral trade relationships significantly.
As trading commenced, South Korea’s Kospi index surged by 1.37%, buoyed by positive performance from auto and shipbuilding stocks. In contrast, the small-cap Kosdaq index experienced a slight dip of 0.1%. Similarly, Japan’s Nikkei 225 began the day marginally below the flatline, while the Topix index registered a modest increase of 0.1%. Australia’s S&P/ASX 200 opened down by 0.29%.
Hong Kong’s Hang Seng index was anticipated to see upward momentum as it resumed trading after a holiday break. Futures for the Hang Seng Index indicated a rise to 26,598, higher than its last close of 26,346.14.
In the U.S., the Dow Jones Industrial Average closed lower on Wednesday after Powell’s comments, despite earlier reaching a record high for the session. It finished down 0.2% at 47,632.00. The S&P 500 followed suit, ending slightly lower at 6,890.59. Conversely, the Nasdaq Composite achieved a fresh record close of 23,958.47, driven by a significant rise in shares of Nvidia.
Overall, the developments in both Asia-Pacific and U.S. markets reflect ongoing shifts in economic policy and investor sentiment amid global trade discussions.
