Global Markets Mixed After US Federal Reserve’s Rate Cut
Global Markets Mixed After US Federal Reserve’s Rate Cut
Global stock markets opened the week on a mixed note Monday as investors paused to reassess prospects following last week’s rally triggered by the US Federal Reserve’s decision to cut interest rates.
Asian markets showed divergent performances, with Tokyo’s benchmark index leading gains after the Bank of Japan clarified it would unwind its massive holdings of exchange-traded funds (ETFs) gradually.
The announcement came after Friday’s market jitters, when Tokyo tumbled on fears of a rapid sell-off following the central bank’s shift away from its long-standing ultra-loose monetary policy.
In the US, investor sentiment was buoyed in part by optimism over US-China relations. Former US President Donald Trump revealed on Friday that his discussions with Chinese President Xi Jinping “made progress on many very important issues,” including a potential agreement surrounding the sale of social media giant TikTok.
Trump added that he would meet Xi on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in South Korea next month and that plans were underway for him to visit Beijing next year.
European markets, however, were more subdued, with traders weighing the implications of lower US borrowing costs on inflationary pressures and global capital flows.
Analysts noted that while the Fed’s rate cut has provided relief to equities, concerns remain over global growth, trade frictions, and the pace of monetary policy normalization in major economies.
Market watchers say this week’s focus will remain on central bank policies and geopolitical developments, with investors awaiting further cues from the Federal Reserve and fresh signals from the US-China dialogue.
