Moving markets today: Fed holds, Tokyo stimulus, and all eyes on Apple
What’s moving markets today?
Wall Street closed higher on Wednesday, led by a 1.6% gain in Nasdaq. This followed the decision by the U.S. Federal Reserve to keep interest rates unchanged at 5.25%-5.50%.
The Bank of England is also set to keep its interest rates on hold at a 15-year high of 5.25% on Thursday.
Market Recap
The Dow Jones Industrial Average gained 221.71 points, or 0.67%, closing at 33,274.58, while the S&P 500 rose by 44.06 points, or 1.05%, to reach 4,237.86. The Nasdaq Composite added 210.23 points, or 1.64%, closing at 13,061.47.
Notable gainers included the interest rate-sensitive information technology sector, which increased by 2%, and communications services, which rose by 1.8%.
Key stock movements included – Advanced Micro Devices rose by nearly 10% on a positive sales forecast for AI chips, while Estee Lauder shares fell by 18.9% due to a lowered annual profit outlook. Paycom Software’s shares sank by 38.5% as they projected lower fourth-quarter revenue. Qualcomm beats fiscal fourth-quarter earnings estimates on China strength, shares rose 3.4% after the results were released.
The 10-year Treasury yield fell by 2 bps to 4.7089%, marking a two-week low after a substantial 14 bps decline the previous day.
The U.S. dollar slipped 0.1% against major currencies, while the Australian dollar reached a three-week high at $0.6428, rising by 0.6%.
Middle East tensions pushed oil prices higher, with Brent crude futures up 1.2% at $85.61 per barrel and U.S. WTI futures at $81.43 per barrel, up 1.2% at the time of writing.
Gold prices inched up by 0.2% to $1,985.86 per ounce.
Markets optimistic after Federal Reserve
The Fed maintained its interest rates at a 22-year high on Wednesday, while keeping the option open for further monetary tightening due to the robust U.S. economy. Comments from its top official fuelled investor and markets optimism that the era of rate increases had concluded, even though it signalled that more hikes were still on the table.
Job openings in the U.S. remained high, layoffs reached a nine-month low – openings rose by 56,000 to reach 9.553 million in September. Layoffs decreased by 165,000 to 1.517 million, the lowest level since December 2022.
Asian stimulus and Chinese property
Japanese Prime Minister Fumio Kishida announced a 17 trillion yen ($113 billion) economic relief package to counter rising inflation, including tax cuts.
China’s financial regulator is implementing stricter capital rules for banks to address financial risks, as revealed in a statement on Wednesday.
China Evergrande has proposed a debt restructuring plan for offshore bondholders, offering them a 30% equity stake in each of the developer’s two Hong Kong-listed subsidiaries, according to sources reported by Reuters.
Bank to call rates
The BoE is expected to announce its latest base rate decision on Thursday, likely following the ECB and the Fed in keeping its borrowing rates at a 15-year high and signalling no imminent rate cuts. Markets have largely priced in a hold.
Today’s economic data ncludes German unemployment change for October, German manufacturing PMI for October, U.S. nonfarm productivity QoQ for Q3, U.S. factory orders MoM for September, U.S. initial jobless claims, and a speech by BoE Governor Andrew Bailey.
Apple ahead
Investors are eagerly awaiting Apple’s results later in the day, which are a key barometer for consumer demand and the tech sector, with a particular focus on potential overheating issues linked to the iPhone 13 launch in September.