Global Markets Mixed After Fed Rate Cut
By Dow Jones Newswires StaffU.S. stock futures were up early in Europe Thursday after the Federal Reserve's quarter-point interest rate cut Wednesday was met with a shrug on Wall Street. The Dow gained 0.6% at the close of Wednesday's session, while the S&P 500 lost 0.1% and the Nasdaq composite fell 0.3%. In his commentary, Fed Chair Jerome Powell reaffirmed the Fed's independence from politics and said monetary policy moves have become more risky, with inflation still above target while the labor market weakens. As a result, the rate path indicates more cuts are likely. The Fed's rate cut is likely to boost short-term sentiment for risk assets, said European digital wealth manager Moneyfarm's Richard Flax in a note.The dollar rose, as did bitcoin. U.S. Treasury yields edged lower, while gold futures fell.U.S. stock futures for the S&P 500 were up 0.5%, futures for the Dow Jones Industrial Average climbed 0.4% and Nasdaq futures rose 0.7%.Asia indexes were mixed, with China seeing profit-taking after the recent session rally. ChiNext closed 1.6% lower, while Shanghai and Shenzhen were down 1.2% each. Japan's Nikkei closed 1.2% higher having eked out a fresh record intraday high with electronics and pharmaceutical stocks leading gains. The Bank of Japan is likely to leave its policy rate unchanged at this week's meeting. South Korea's Kospi added 1.4%. Hong Kong's Hang Seng closed down 1.4%.European stock markets started the day up with Germany's DAX leading the pack with a gain of nearly 1.0% shortly after the open. France's CAC 40 rose 0.6%. The pan-European Stoxx 600 gained 0.5%. The U.K's FTSE 100 rose around 0.2% ahead of a Bank of England rate decision where it is expected to stand pat.Yields on U.S. Treasurys edged lower; the 10-year yield was last down 1.2 basis points to 4.063%, while the 30-year yield was down 1.6 basis points to 4.657%, according to Tradeweb data.The dollar rose as investors continue to digest the Fed's rate cut, with markets left feeling less confident on the extent of the likely easing cycle, Deutsche Bank analysts said. The Fed's so-called dot plot pointed to two more 25bp cuts at this year's remaining two meetings along with further cuts next year but Powell said the Fed would take a meeting-by-meeting approach. Thee DXY dollar index against a basket of major currencies rose 0.4% to 97.251.Bitcoin continued its steady gains, remaining near the one-month high reached earlier. It was last up 1.4% to $117,205, having reached a high of $117,921 earlier, according to LSEG data.Gold futures, which have hit repeated records this year, retreated on the firmer U.S. dollar and the Fed's policy outlook. In early trading in Europe futures were down 1.1% to $3,678.30 a troy ounce. Oil prices also slipped, with Brent down 0.5% to $67.60 a barrel.Write to Barcelona Editors at [email protected]