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Fed pauses as tech earnings unsettle markets

Wall Street advanced on Wednesday as the Federal Reserve (Fed) opted against another rate increase despite mounting inflation pressures. European stocks ended the session mixed, while disappointing results from Alphabet and Samsung put Asian equities under pressure on Thursday. Attention now turns to today's European Central Bank policy decision. Amazon’s quarterly results will also offer a fresh test of investor confidence in the AI investment boom.

  • Date
  • Auteur Shane Strowmatt, Senior Investment Writer
  • Temps de lecture 5 minutes

Federal Reserve Building
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Fed holds key rates despite rising US inflation

The Fed kept its benchmark interest rate at 3.75%-4.00% on Wednesday, following last month’s increase, although two policymakers favoured a further quarter-percentage-point rise. US consumer price inflation accelerated to 3.7% in September from 3.4% in August, while the core measure, excluding food and energy, increased to 2.6% from 2.4%. Federal Reserve Chair Kevin Warsh acknowledged that price stability remained elusive, with officials seeking more evidence before deciding their next policy move. The US Dollar Index edged up 0.1% to 102.25, while gold declined 1% to around USD 4030 per ounce. US Treasury yields moved lower, with the two-year yield below 4.7% and the ten-year yield still above 5%.

US stocks rise after Fed decision

US equities closed higher on Wednesday, with the Nasdaq 100 gaining 0.6% to 29,813.16 points, the S&P 500 rising 0.3% to 7743.98 points and the Dow Jones Industrial Average advancing 0.2% to 52,475.10 points. Renewed interest in artificial intelligence and strong results from South Korean memory-chip producer SK Hynix supported semiconductor shares, with Micron and Sandisk gaining up to 7.7%. Software group Oracle climbed more than 10% after outlining a medium-term revenue target implying average annual growth above 35%.

Oil falls on renewed peace hopes

Brent crude oil futures fell 1.1% to USD 110.37 a barrel, while West Texas Intermediate (WTI) futures declined 1.3% to USD 101.50, partially reversing Wednesday’s gains. Hopes of renewed negotiations increased after reports that US Vice President JD Vance had contacted Iran, although escalating Houthi attacks involving Saudi Arabia limited the decline amid concerns about regional oil supplies.

Asian stocks retreat as tech earnings disappoint

Asian equities weakened on Thursday, with South Korea’s KOSPI falling 1.2% after gaining nearly 7% on Wednesday, while China’s Shanghai Composite declined 1.2% and mainland China’s CSI 300 fell 1.1%. Samsung Electronics dropped 3.9% despite record third-quarter earnings, as semiconductor profits missed expectations and investors awaited clarity on additional shareholder distributions. Google parent company Alphabet fell about 10% in after-hours US trading following disappointing results and plans for substantial AI infrastructure spending, whereas software giant Microsoft gained about 3% on stronger-than-expected cash flow.

German consumer sentiment remains weak

Germany’s NIM/GfK consumer climate indicator edged down to -30.8 points for November from -30.6 for October, compared with -22.5 a year earlier, according to figures released on Wednesday. Economic expectations improved for a sixth consecutive month to 2.1 points, turning positive for the first time since the Iran war began. On Wednesday, Germany’s DAX gained 0.4%, the Euro Stoxx 50 was little changed and the Swiss Market Index slipped 0.1%.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Air Liquide, Amazon, Anheuser-Busch InBev, AXA, BBVA, Bristol-Myers Squibb, BYD, Caterpillar, Eli Lilly, ING, Intel, Linde, Mastercard, Merck & Co, Samsung Electronics, Shell, Starbucks, STMicroelectronics, Stryker, and TotalEnergies.

Economic data in focus: Italian unemployment rate and trade balance (11:00), US personal consumption expenditures (13:30), US gross domestic product (13:30), US weekly initial jobless claims (13:30), European Central Bank interest rate decision (14:15).

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Editor: Alessandro Fezzi
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