Stock market today: Asian markets forge higher after Fed’s first rate cut in over 4 years

Asian markets rose on Thursday after the Federal Reserve launched its efforts to prevent a recession in the US with a bigger than normal interest rates lowered.

In Tokyo, the Nikkei 225 index rose 2.1 percent to 37,155.33, boosted by shares of major export manufacturers. Toyota Motor Corp. rose 5.1 percent, Sony Group Corp. rose 2.9 percent and Hitachi Ltd. rose 5.8 percent.

Hong Kong’s Hang Seng rose 1.9% to 17,993.30.

The Shanghai Composite index rose 0.7% to 2,736.51, while Taiwan’s Taiex rose 1.7%.

South Korea’s Kospi rose 0.2% to 2,579.86.

The Bank of Japan and the Bank of England are also holding monetary policy meetings this week. Neither central bank is expected to change interest rates, although the language of what officials say could be indicative of later moves and could still affect markets.

Because the Fed’s half-percentage-point rate cut was so well-announced, markets had already rallied in anticipation. Wall Street’s reaction to the 180-degree turn in policy rates was thus relatively muted.

“Markets barely reacted to the Fed’s 50 basis point rate cut, and our base case is that further cuts won’t change much either,” Thomas Mathews of Capital Economics said in a commentary.

It was the first cut in federal interest rates in more than four years, ending a run in which the Fed held rates at 20-year highs to slow the U.S. economy enough to quell the worst inflation in generations.

On Wednesday is the S&The P 500 fell 0.3% to close at 5,618.26. The Dow Jones Industrial Average fell 0.2% to 41,503.10. The Nasdaq Composite lost 0.3% to 17,573.30.

The Fed’s move could help financial markets in two ways. It takes the brakes off the economy, which is delayed under the weight of higher rates, and it’s boosting prices for all sorts of investments. In addition to stocks, gold and bond prices have already risen in recent months on expectations that rate cuts are coming.

Now that inflation has decreased considerably of the highlight two summers ago and it looks set to move toward 2%, the Fed says it can focus more on protecting the slowing labor market and the overall economy.

“The time to support the labor market is when it’s strong, not when you start seeing layoffs,” Fed Chairman Jerome Powell said. “That’s the situation we’re in.”

Some critics say the Federal Reserve has kept interest rates too high for too long, but Powell said, “We don’t think we’re behind the times.”

“We think this is timely. But I think you can take this as a sign of our commitment not to fall behind,” Powell said at a news conference after the Fed’s announcement.

“The focus has now definitely shifted to the labour market, and there is a sense that the Fed is trying to strike a better balance between jobs and inflation,” said Stephen Innes of SPI Asset Management.

Like stock prices, U.S. Treasury yields swung up and down repeatedly after the Fed announced its rate cut and released its forecasts.

Tupperware brand trading remained quiet after the company has filed for Chapter 11 bankruptcy protectionThe stock has fallen to 51 cents since a small rebound at the start of the pandemic sent it above $30.

All in all, the S&The P 500 fell 16.32 points to 5,618.26. The Dow fell 103.08 to 41,503.10 and the Nasdaq Composite lost 54.76 to 17,573.30.

In other trading, U.S. benchmark crude lost 20 cents to $69.68 a barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international standard, fell 22 cents to $73.43 a barrel.

The dollar rose to 142.58 Japanese yen from 142.29 yen. The euro rose to 1.1132 dollars from 1.1120.