Stock market today: Asian markets wobble after Fed sticks with current interest rates

HONG KONG — Asian markets wobbled in Thursday trading after U.S. stocks headed to a mixed close, with the Federal Reserve postponing interest rate cuts.

US futures rose and oil prices rose.

Tokyo’s Nikkei 225 index fell 0.1% to 38,236.07.

The Japanese yen rose as much as 2% in early hours in Asia on Thursday, driven by speculation about a new round of yen-buying intervention by Japanese authorities and a weaker US dollar after the Fed meeting. Later, the yen reversed course, erasing previous gains. The dollar was trading at 155.31 yen, up from 154.91 yen.

“As expected, the Japanese Ministry of Finance, through the Bank of Japan, again sold US dollars to stabilize the yen. Indeed, the Japanese government is digging into its vast $1.2 trillion war chest in the hope of making a profit on the dollar it bought back in 2000,” said Stephen Innes, managing partner at SPI Asset Management, in a commentary . The hope was to stabilize the yen around 155-157 against the dollar.

In South Korea, the Kospi fell 0.2% to 2,686.30 after official data showed the country’s consumer prices reached an annualized 2.9% in April, a slower pace compared with March data.

Hong Kong’s Hang Seng index rose 2.4% to 18,190.32. Other markets in China remained closed for the Labor Day holiday.

Elsewhere, the Australian S&P/ASX 200 rose 0.2% to 7,587.00.

On Wednesday the S&The P500 fell 0.3% to 5,018.39 after the Fed kept its key interest rate at its highest level since 2001, just as markets expected. The index was up as much as 1.2% in the afternoon before giving up all gains at the end of trading.

The Dow Jones Industrial Average rose 0.2% to 37,903.29, and the Nasdaq composite lost 0.3% to 15,605.48.

On the downside for financial markets, Federal Reserve Chairman Jerome Powell said out loud about the fear that has recently sent stock prices plummeting and wiped out traders’ hopes for upcoming rate cuts: “In recent months, inflation has shown a lack of further progress towards our 2% target.” He also said it will likely take “longer than previously expected” to gain enough confidence to cut interest rates, a move that would ease pressure on the economy and investment prices.

At the same time, however, Powell calmed fears swirling in the market that inflation has remained high enough that additional rate hikes may be necessary.

“I think it’s unlikely that the next rate hike will be a rate hike,” he said.

The Fed also offered some help to financial markets by saying it would slow the pace of its Treasury bond cuts. Such a move could oil the wheels of trade in the financial system and provide stability to the bond market.

Traders themselves had already lowered their expectations for rate cuts this year to one or two, after predicting six or more this year. That’s because they saw the same set of reports as the Fed, showing that inflation remained stubbornly higher than forecast this year.

Powell had already hinted that interest rates could remain high for a while. That was a disappointment for Wall Street, after the Fed had previously indicated that it would implement three interest rate cuts in 2024.

The U.S. manufacturing sector shrank unexpectedly last month, according to a report from the Institute for Supply Management. A separate report said U.S. employers advertised slightly fewer jobs in late March than economists expected.

The hope on Wall Street was that a cooldown could help prevent upward pressure on inflation. The downside is that if the economy weakens too much, there could be significant support for the economy.

In energy trading, U.S. benchmark crude ended three days of decline, rising 50 cents to $79.50 a barrel. Brent crude, the international standard, rose 59 cents to $84.03 a barrel.

In currency trading, the euro cost $1.0718, up from $1.0709.