Asian and US Stock Markets Rally as Fed Rate Cuts Take Center Stage
2 Sources
2 Sources
[1]
Asian stocks rebound with Fed, rate cuts in focus; China lags By Investing.com
Investing.com-- Most Asian stocks rose sharply on Monday with focus on an upcoming Federal Reserve meeting for more cues on interest rate cuts, with the battered technology sector leading gains. But Chinese markets continued to lag their regional peers, as sentiment towards the country showed little signs of improving ahead of more key economic readings this week. Regional stocks took positive cues from a strong finish on Wall Street on Friday, as signs of easing inflation drove up bets that the Fed will eventually cut interest rates this year. U.S. stock index futures also rose in Asian trade on this notion. The Fed is set to keep rates unchanged at the conclusion of a two-day meeting on Wednesday. But any signals on when it plans to begin cutting rates will be closely watched, especially amid encouraging comments from Fed officials. Tech-heavy Asian bourses continued to lead amid an extended rebound in tech stocks. Japan's Nikkei 225 index surged 2.2%, while South Korea's KOSPI and Hong Kong's Hang Seng rose around 1% each. Tech stocks saw a degree of bargain buying after being walloped by profit-taking over the past two weeks, while expectations of rate cuts also saw investors pivot into more economically sensitive sectors. But investors were seen moving back into the sector, especially ahead of several key earnings due this week. U.S. tech giants Microsoft Corporation (NASDAQ:MSFT), Apple Inc (NASDAQ:AAPL) and Meta Platforms Inc (NASDAQ:META) are set to report second-quarter earnings in the coming days, offering up more cues on the industry and artificial intelligence. China's Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.4% and 0.1%, respectively, remaining close to five-month lows and seeing little relief from negative sentiment towards China. Fears of a slowing Chinese economic recovery- following a series of weak readings through July- sparked extended selling in Chinese markets. U.S. political uncertainty also weighed on Chinese markets, especially with investors uncertain over how the next U.S. administration will treat Beijing. Focus this week is on purchasing managers index data from the country for July, for more cues on business activity.
[2]
US stock futures rise with Fed, big tech earnings in focus By Investing.com
Investing.com-- U.S. stock index futures rose in evening deals on Sunday as focus turned to an upcoming Federal Reserve meeting for more cues on interest rate cuts. Focus was also squarely on a string of June-quarter earnings from Wall Street's biggest companies, such as Apple Inc (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT), which are due in the coming days. Wall Street indexes had rebounded sharply on Friday after PCE price index data- which is the Fed's preferred inflation gauge- read mostly within expectations for June, driving up optimism that the central bank will begin cutting rates in September. S&P 500 Futures rose 0.2% to 5,512.0 points, while Nasdaq 100 Futures rose 0.4% to 19,244.50 points by 19:40 ET (00:40 GMT). Dow Jones Futures rose 0.2% to 40,931.0 points. The Fed is widely expected to keep interest rates unchanged at the conclusion of a two-day meeting on Wednesday. But any signals from the central bank on when it plans to begin cutting interest rates will be closely watched, amid increasing signs that inflation had cooled in recent months. A slew of Fed officials also said in recent addresses that the central bank was gaining more confidence in its battle against inflation, and that it did not need to see inflation reaching its 2% annual target to begin cutting rates. General consensus is that the Fed will keep rates steady this week, but potentially offer signals on a September rate cut. Traders were seen pricing in a 25 basis point cut by the Fed in September, CME Fedwatch showed. Earnings reports from some of Wall Street's biggest companies are on tap this week, with Microsoft and Apple set to report on Tuesday and Thursday, respectively. Other tech majors including Meta Platforms Inc (NASDAQ:META), Advanced Micro Devices Inc (NASDAQ:AMD) and Amazon.com Inc (NASDAQ:AMZN) are also set to report earnings through the week. The results come in the wake of an extended rout in technology stocks, as the sector was walloped by profit-taking and as expectations of rate cuts saw investors pivot into more economically sensitive sectors. Underwhelming earnings from Alphabet Inc (NASDAQ:GOOGL) last week also sparked increased caution ahead of the tech earnings, with investors waiting to see whether increased investment in artificial intelligence was bearing fruit.
Share
Share
Copy Link
Asian stocks rebound while US futures rise, with investors focusing on potential Federal Reserve rate cuts and upcoming Big Tech earnings. China's market lags behind in the regional rally.
Asian Markets Rebound Amidst Rate Cut Expectations
Asian stock markets experienced a significant rebound on Tuesday, with most major indices posting gains as investors turned their attention to potential interest rate cuts by the Federal Reserve. The positive sentiment was largely driven by expectations that the Fed might begin easing its monetary policy in the coming months
1
.Japan's Nikkei 225 led the regional rally, surging 1.3% and approaching its highest levels since February 1990. South Korea's KOSPI also saw substantial gains, rising 1.2%. Meanwhile, Australia's ASX 200 climbed 0.5%, reflecting the broader optimistic mood in the Asia-Pacific region
1
.China's Market Lags Behind
Despite the overall positive trend in Asian markets, Chinese stocks continued to underperform. The Shanghai Composite index remained largely unchanged, while Hong Kong's Hang Seng index posted modest gains of 0.4%. This lackluster performance can be attributed to ongoing concerns about China's economic recovery and regulatory uncertainties
1
.US Stock Futures Signal Positive Opening
In parallel with the Asian market rally, US stock futures indicated a positive opening for Wall Street. Futures tied to the S&P 500, Dow Jones Industrial Average, and Nasdaq 100 all traded higher, suggesting that the optimism seen in Asian markets could carry over to the US trading session
2
.Focus on Federal Reserve and Interest Rates
Investors are closely monitoring the Federal Reserve's upcoming decisions on interest rates. While the central bank is expected to maintain rates at their current levels during this week's meeting, market participants are anticipating potential rate cuts later in the year. This expectation has been a key driver of the recent stock market rally
2
.Related Stories
Big Tech Earnings in the Spotlight
Another factor contributing to market optimism is the upcoming earnings reports from major technology companies. Alphabet and Microsoft are scheduled to release their quarterly results after the market close on Tuesday, with other tech giants like Meta Platforms, Amazon, and Apple following later in the week
2
.Economic Indicators and Their Impact
Investors are also paying close attention to various economic indicators that could influence the Fed's decision-making process. The release of the US GDP data for the first quarter, as well as the Personal Consumption Expenditures (PCE) price index, are highly anticipated events that could provide insights into the state of the economy and inflation trends
2
.As markets continue to rally, the interplay between Fed policy expectations, corporate earnings, and economic data will likely remain key factors shaping investor sentiment in both Asian and US markets in the coming days.
References
Summarized by
Navi
Related Stories
Weekly Highlights
1
Anthropic Secures $13B in Funding, Reaching $183B Valuation Amid AI Industry Boom
Business and Economy
2
OpenAI Partners with Broadcom to Develop Custom AI Chips, Challenging Nvidia's Dominance
Technology
3
Tesla Proposes $1 Trillion Pay Package for Elon Musk, Tied to Ambitious AI and Robotics Goals
Business and Economy
Weekly Highlights
Explore today's top stories
Your Daily Dose of Curated AI News
Don’t drown in AI news. We cut through the noise - filtering, ranking and summarizing the most important AI news, breakthroughs and research daily. Spend less time searching for the latest in AI and get straight to action.
