HONG KONG (AP) — Global stock markets were mixed on Monday as U.S. markets neared record highs on hopes that the Federal Reserve will begin easing monetary policy. Interest rate cuts It will help the economy immediately.
France’s CAC 40 rose 0.2% to 7,594.42 at the open, while Germany’s DAX was down 0.2% to 18,597.20. Britain’s FTSE 100 rose 0.5% to 8,327.78. Futures for the S&P 500 and Dow Jones Industrial Average both rose 0.1%.
Oil prices have risen following attacks by Israel and the Lebanese militant group Hezbollah. Heavy gunfire was exchanged That could cause supply concerns on Sunday.
On Friday, Fed Chairman Jerome Powell said: cut key interest rates from 20-year highs.
“The time has come to adjust policy,” Powell said. “The direction to move is clear, and the timing and pace of rate cuts will depend on upcoming data, evolving outlook, and the balance of risks.”
The stance saw the yen strengthen against the dollar, which was down 0.35% to 143.86 yen in Monday trading.
The Bank of Japan’s governor suggested on Friday that Japan’s interest rates could rise further if inflation is on track to sustainably reach its 2 percent target. This comes after the central bank raised its policy rate to about 0.25 percent from a 0-0.1 percent range in late July, aiming to stem the yen’s decline against the dollar. The governor also said the bank was closely monitoring recent stock price and currency fluctuations.
Japan’s benchmark Nikkei stock average fell 0.7% to close at 38,110.22, hurt by the stronger yen.
The People’s Bank of China left the one-year medium-term lending facility (MLF) rate unchanged at 2.30% on Monday after cutting it by 20 basis points in July. This was postponed from the usual mid-month schedule as part of the central bank’s plan to overhaul its policy rate system and reduce the role of the MLF rate in using shorter-term interest rates to guide the market.
Hong Kong’s Hang Seng Index rose 1.1% to 17,798.73, while the Shanghai Composite Index rose less than 0.1% to 2,855.52.
Australia’s S&P/ASX 200 rose 0.8% to 8,084.50. South Korea’s KOSPI fell 0.1% to close at 2,698.01.
The S&P 500 rose 1.1% to 5,634.61 on Friday. The index is within 0.6% of its all-time high set last month, having recouped nearly all of its losses from the short-lived but terrifying summer sell-off.
The Dow Jones Industrial Average rose 1.1% to 41,175.08, surpassing the 41,000-point mark for the first time since hitting a record high in July, while the Nasdaq Composite rose 1.5% to 17,877.79.
Powell’s speech marked a sharp policy shift for the Fed, which began raising interest rates two years ago as inflation soared to the worst level in generations. The Fed’s goal was to make monetary policy very costly for American businesses and households to implement. borrow it is slowed down the economy and Subdued inflation.
While Powell was careful to say mission is not done, he described many of the conditions that caused inflation to spike after the pandemic in the past tense, including that the job market is “no longer overheating.” That means the Fed can now pay more attention to the other of its twin missions: protecting an economy that is slowing but has so far defied many recession predictions.
Small-cap stocks in the Russell 2000 led the market, rising 3.2%. Smaller companies can benefit more from lower interest rates because they need to borrow to grow.
More than 85% of the stocks in the S&P 500 index of large companies rose.
In the bond market, the yield on the 10-year Treasury note fell to 3.79% from 3.86% late Thursday. The yield on the two-year note, which moves in tandem with expectations of Fed action, fell to 3.91% from 4.01% late Thursday.
In energy trading, benchmark U.S. crude rose 78 cents to $75.61 a barrel, while the international standard Brent crude added 78 cents to $78.93 a barrel.
The euro fell from $1.1190 to $1.1181.
