Asian Markets High, Wall Street Down After Fed Announcement

Asian markets high, with Japan and Australia gaining, while Wall Street slipped after the Fed kept interest rates unchanged. Commodities and bonds stayed steady.

Asian stock markets showed a mixed performance on Thursday as investors in Japan and Australia celebrated modest gains. In contrast, some regional markets remained closed for the Lunar New Year. The contrasting performance came after Wall Street’s decline following the U.S. Federal Reserve’s decision to keep interest rates unchanged.

The Nikkei 225 rose 0.42% in Japan, while the Topix index gained 0.28%. Despite some volatility, Japanese tech stocks were among the day’s biggest winners, with Advantest surging 5.12% and Tokyo Electron rising 2.03%. SoftBank Group saw a slight dip of 0.5% amid reports of its discussions to invest as much as $25 billion in OpenAI. However, this did little to offset the overall upward momentum in Japan’s broader market.

The S&P/ASX 200 climbed by 0.7% in Australia, extending the previous day’s gains. The country’s export price index reported a 3.6% increase in the fourth quarter of 2024, although it still showed a decline of 8.6% over the year. According to data released by the Australian Bureau of Statistics, import prices rose by 0.2% for the quarter but fell 1.9% annually.

India’s markets saw a subdued start, with the Nifty 50 opening 0.19% higher, while the BSE Sensex Index remained flat in early trading.

Asian Markets High, Wall Street Down After Fed Announcement

Meanwhile, Wall Street faced a downturn after the Federal Reserve opted to leave the Federal Funds Rate unchanged at 4.50%, which was in line with expectations. The decision sparked uncertainty over the direction of future rate hikes, leading to a 0.47% drop in the S&P 500, which closed at 6,039.31. The Nasdaq Composite lost 0.51% to finish at 19,632.32, and the Dow Jones Industrial Average shed 136.83 points, or 0.31%, closing at 44,713.52.

In particular, Nvidia shares tumbled by 4.1% following reports that the Trump administration had discussed limiting the company’s chip sales to China. This news comes amid increasing competition with China’s DeepSeek AI model, leading to growing tensions in the tech sector.

Commodities and Bond Markets:

In commodities, gold held steady at $2,796.35 per ounce, up 0.13%, while silver rose by 0.78% to $31.65 per ounce. However, oil prices were largely stable, with Brent Crude dipping 0.09% to $75.49 per barrel and WTI Crude gaining a slight 0.13% to $72.64 per barrel.

Bond yields remained mixed, with the U.S. 10-year yield at 4.523%, the UK’s 10-year yield at 4.6070%, and Germany’s 10-year yield at 2.571%.

Economic Data:

On the economic data front, Canada’s overnight rate remained unchanged at 3.00%, which aligns with market expectations. In the U.S., the Federal Funds Rate was also kept at 4.50%, confirming earlier forecasts. Investors are now paying attention to upcoming economic reports, including the U.S. Advance GDP q/q and Unemployment Claims, scheduled for release at 01:30 PM GMT.

Upcoming Events:

• 01:15 PM GMT – EUR Main Refinancing Rate
• 01:30 PM GMT – USD Advance GDP q/q
• 01:30 PM GMT – USD Unemployment Claims
• 01:45 PM GMT – EUR ECB Press Conference

As investors await further signals from central banks and economic indicators, market watchers will closely monitor global trends for the next phase of market developments.

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