Asian stock markets took off on Wednesday as traders hoped for the last Federal Reserve interest rate hike for some time. With US futures edging lower and oil prices gaining, the focus was on the Fed’s expected rate hike of 0.25 percentage points. Despite the hike, traders hope that this will be the last one for a while, given the recent slowdown in U.S. wage growth.
S&P 500 Rises as Traders Take U.S. Wage Growth as a Positive Sign
Wall Street’s benchmark S&P 500 index rose 1.5% on Wednesday as traders took the slowed U.S. wage growth as a positive sign. The US central bank’s efforts to slow economic activity appeared to be taking effect, leading to increased optimism among traders. Investors will now be closely monitoring the Fed’s decision and Chair Jerome Powell’s comments at a planned news conference to determine if the bank will ease off its plans for further rate hikes.
Asian Markets Gain as Shanghai Composite Index Rises 0.1%
The Asian markets were in full swing on Wednesday as the Shanghai Composite Index rose 0.1%. The Nikkei 225 in Tokyo advanced 0.2%, while the Hang Seng in Hong Kong added 0.5%. The Kospi in Seoul rose 0.8% and Sydney’s S&P-ASX 200 was 0.5% higher at 7,512.10. Despite some markets declining, such as Singapore, other Southeast Asian markets rose, offering a positive outlook for the region.
Wall Street Ends January with Its Third Monthly Gain in Four Months
The Wall Street’s S&P 500 index advanced to 4,076.60 on Wednesday, ending January with its third monthly gain in the past four months. The Dow Jones Industrial Average rose 1.1% to 34,086.04, while the Nasdaq rose 1.7% to 11,584.55. Traders expected a Fed rate hike of 0.25 percentage points, with investors hoping that the bank will declare victory and roll back its rate increases starting later this year.
Mixed Corporate Profit Reports and Uneasy Investors
The latest round of corporate profit reports have been mixed, with some companies reporting stronger profits while others fell short. McDonald’s fell 1.3% despite reporting stronger profit and revenue than expected, suggesting that investors might be uneasy about upcoming profit margins as the economy cools. Caterpillar dropped 3.5% after reporting weaker profit, while General Motors rose 8.3% after reporting stronger profit and revenue. In energy markets, benchmark U.S. crude rose 29 cents while Brent crude advanced 19 cents. The dollar fell, while the euro declined.
