The global financial landscape shifted on Wednesday, September 18th, following the Federal Reserve’s decision to cut interest rates by 50 basis points, the first reduction in over four years. While U.S. markets initially reacted positively, they ultimately closed lower, with the Dow Jones Industrial Average down 0.04% at 41,606.18 and the S&P 500 ending the day slightly higher at 5,634.58. The Nasdaq Composite, however, rose 0.20%, finishing the session at 17,628.06.
Despite the overall mixed performance in the U.S., Asian markets welcomed the news with enthusiasm. Japan’s Nikkei 225 soared 2.15% to 37,120.50, led by gains in the Food, Fishery, and Services sectors. Australia’s S&P/ASX 200 also closed higher, gaining 0.61% to 8,191.90, with strong performance in the Materials, Metals & Mining, and Resources sectors. India’s Nifty 50 saw a modest increase of 0.15% to 25,415.80, while Nifty 500 dipped slightly to 23,853.95. China’s Shanghai Composite and Shanghai Shenzhen CSI 300 also closed in the green, gaining 0.69% and 0.79%, respectively. Hong Kong’s Hang Seng Index saw a significant jump of 2.00%, ending the day at 18,013.16.
European markets echoed the positive sentiment, with the European STOXX 50 index rising 1.69%. Germany’s DAX climbed 1.39%, France’s CAC gained 1.90%, and the U.K.’s FTSE 100 traded 1.21% higher. The rate cut ignited optimism about a potential soft landing for the global economy, boosting investor confidence in European markets. Miners led the rally, followed by gains in real estate, tech, and banking sectors.
The rate cut also sent ripples across the commodities markets. Crude Oil WTI surged 1.09% to $70.64/bbl, while Brent crude oil climbed 1.00% to $74.42/bbl. The move reflects expectations that the rate cut will stimulate economic activity, leading to increased energy demand. However, concerns about slowing global growth, particularly from China, kept prices below the $75 mark.
Natural Gas prices also rose, up 1.18% to $2.311. Meanwhile, precious metals saw gains as well, with gold trading 0.64% higher at $2,615.20, silver surging 2.69% to $31.515, and copper climbing 1.60% to $4.3678.
Looking ahead, U.S. futures were trading in the green early Thursday morning. Dow futures were up 1.10%, S&P 500 futures rose 1.51%, and Nasdaq 100 Futures gained 1.98%. The U.S. Dollar Index fell 0.04% to 100.55, while USD/JPY rose 0.49% to 142.96, and USD/AUD declined 1.02% to 1.4632.
