Global Markets on Edge as Investors Anticipate Fed’s Next Move

Global markets mixed as investors await the Fed’s next move, focusing on economic data, central bank decisions, and global growth signals.

Global Markets Update
Asia-Pacific markets opened mixed on Tuesday as investors remained cautious ahead of the U.S. Federal Reserve’s closely watched policy decision. Markets are weighing economic data, monetary policy signals, and China’s latest fiscal announcements.

Asia-Pacific Stocks Mixed
Australia’s S&P/ASX 200 led regional gains, climbing 0.78% on strength in the mining and financial sectors. Japan’s Nikkei 225 slipped 0.07%, while the broader Topix index increased 0.11%. South Korea’s Kospi fell sharply by 1%, and the tech-heavy Kosdaq lost 0.92%, reflecting investor caution.

The Shanghai Composite dropped 0.51% in China, while Hong Kong’s Hang Seng Index edged down 0.20%. This muted performance followed the Chinese government’s announcement to raise its 2025 budget deficit to 4% of GDP to sustain economic growth at 5% for the coming year. However, China’s CSI 300 bucked the trend, rising 1.1%, buoyed by optimism over fiscal support.

U.S. Market Recap
Wall Street delivered a mixed session overnight. The tech-heavy Nasdaq Composite soared 1.24% to a record close of 20,173.89, supported by gains in major technology stocks. The S&P 500 rose 0.38% to 6,074.08, while the Dow Jones Industrial Average slipped 0.25% or 110.58 points to close at 43,717.48, marking its eighth consecutive loss—the index’s longest losing streak since 2018.

Global Markets on Edge as Investors Anticipate Fed’s Next Move

A notable drag on the tech sector came from Nvidia, which fell 1.7%, extending its recent losses and pushing the AI chip giant’s stock into correction territory—more than 10% off its November peak.

Investors Await the Fed Decision
All eyes are now on the U.S. Federal Reserve’s policy meeting set for December 18. Market participants widely anticipate a 25-basis-point rate cut, with the CME FedWatch Tool reflecting a 98.2% probability. Traders are also eager for insights into the Fed’s outlook on inflation and economic growth heading into 2025.

The market’s cautious optimism comes amid mixed U.S. economic data. The Flash Services PMI fell short of expectations at 48.3 versus the anticipated 49.4, signaling contraction. However, manufacturing data surprised the upside, with the Flash Manufacturing PMI jumping to 58.5, exceeding the 55.7 forecast.

Commodities and Bond Markets
Prices in commodities remained under pressure. Gold traded at $2,668.35 per ounce, down 0.04%, while silver fell 0.38% to $30.84 per ounce. Crude oil benchmarks declined, with Brent crude at $74.09 (-0.16%) and WTI crude at $70.40 (-0.39%), as global demand concerns persisted.

Bond yields were mixed. The U.S. 10-year Treasury yield held steady at 4.401%, while the UK 10-year gilt yielded 4.44%. Germany’s 10-year bund yield remained subdued at 2.243%.

Key Economic Events Ahead
Market watchers are looking ahead to a slew of key economic releases, including:

• 1:30 PM GMT – U.S. Core Retail Sales (m/m)
• 1:30 PM GMT – U.S. Retail Sales (m/m)
• 1:30 PM GMT – Canadian CPI (m/m)
• 1:30 PM GMT – Canadian Median CPI (y/y)
• 1:30 PM GMT – Canadian Trimmed CPI (y/y)

These data points will provide further clues on consumer spending trends and inflationary pressures as central banks navigate monetary policy in a slowing global economy.

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