Asian stock markets displayed mixed performance on Thursday following a volatile session on Wall Street, where the U.S. Federal Reserve’s interest rate cut influenced investor sentiment. While the Fed’s move was anticipated, comments from Chair Jerome Powell stirred speculation about potential future cuts, particularly in 2026. This backdrop, however, led to declines in several major technology stocks after Oracle, a key player in the artificial intelligence sector, reported earnings that fell short of expectations.
In Tokyo, the Nikkei 225 index declined by 0.9% to close at 50,148.82. A significant contributor to this drop was the 7.7% fall in shares of SoftBank Group Corp., which has heavily invested in AI technologies. The local market is also reacting to growing anticipation that the Bank of Japan may increase interest rates during its upcoming meeting next week.
Meanwhile, in Hong Kong, the Hang Seng index experienced a slight decrease of 0.1% to 25,513.38. This followed a decision by the Hong Kong Monetary Authority to lower borrowing costs to 4.00%, the lowest level since October 2022. In contrast, the Shanghai Composite index fell 0.7% to 3,873.32 amid cautious sentiment ahead of China’s November credit data, which is anticipated due to a sharp decline in new yuan loans in October, indicating weaker consumer demand.
In Australia, the S&P/ASX 200 managed a modest gain of nearly 0.2%, closing at 8,592.00. This uptick was supported by robust performances in the gold and mining sectors. Notably, the country’s seasonally adjusted unemployment rate remained steady at 4.3% in November, slightly better than the projected 4.4%.
South Korea’s Kospi index slipped 0.6% to 4,110.62 as early gains evaporated. Shares of chipmaker SK Hynix fell 3.8% following warnings from the country’s main stock exchange regarding its rapid stock price increases this year. Taiwan’s Taiex index also closed down by 1.3%, while India’s BSE Sensex rose by 0.4%.
On the U.S. side, the S&P 500 increased by 0.7% to reach 6,886.68, just shy of its all-time high set in October. The Dow Jones Industrial Average surged 1% to 48,057.75, and the Nasdaq Composite rose 0.3% to 23,654.16. Lower interest rates are typically welcomed by investors as they can stimulate economic growth and enhance investment values, despite the potential risks of exacerbating inflation.
Powell’s remarks suggested a delicate balance for the Fed, indicating that while the job market is showing signs of slowing, inflation pressures remain. He acknowledged the challenges in addressing these issues, stating that efforts to remedy one often lead to complications for the other in the short term. For the first time in the current cycle of rate cuts, Powell noted that interest rates are positioned to neither push inflation nor the job market up or down, allowing the Fed time to evaluate its next steps as more data emerges.
In corporate developments, shares of GE Vernova soared 15.6% after the company raised its revenue forecast for 2028, doubled its dividend, and expanded its stock buyback program. Other notable movements included Palantir Technologies, which gained 3.3%, and Cracker Barrel Old Country Store, which rose by 3.5%.
As trading continued, U.S. benchmark crude oil prices fell by 31 cents to $58.15 per barrel, while Brent crude slipped by 34 cents to $61.87 per barrel. The U.S. dollar showed slight strength against the Japanese yen, rising to 156.04 from 156.02 yen, while the euro dipped to $1.1687 from $1.1696.
Investors will be watching closely as the economic landscape evolves, particularly in relation to interest rates and corporate earnings, which remain pivotal in shaping market trajectories.
