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08-05-2025
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Global Markets React to Fed Decision, Trade Tensions

Date: 08-05-2025
Sources: cnbc.com: 2 | economist.com: 1
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Image Source:

Source: economist.com

Image content: The main subject of this image is an overwhelming number of shipping containers being transported by two large trucks. The containers are stacked on top of each other, with various logos and colors visible, indicating that they belong to different shipping companies. The scene depicts a busy and industrial setting, likely a port or transportation hub, with the trucks carrying a significant cargo load.

Summary

The US Federal Reserve held interest rates steady, citing inflation and unemployment risks, with global markets reacting mixed to the decision. Investors are now focused on upcoming economic reports and earnings releases, while also monitoring trade tensions between the US and China.

Key Points

  • The Federal Reserve kept interest rates at 4.25%-4.5%, warning of potential inflation and economic growth risks
  • Global markets reacted mixed to the Fed decision, with Asia-Pacific markets trading in both positive and negative territory
  • Investors are largely shrugging off trade war concerns, with the S&P 500 down only 2.4% despite market turmoil

Articles in this Cluster

Stock market today: Live updates

08-05-2025

Stock futures were slightly higher on Thursday after the Federal Reserve held interest rates steady at 4.25%-4.5%, citing rising inflation and unemployment risks. The S&P 500 finished 0.43% higher the previous day, supported by a 3% rise in Nvidia. Investors are now looking ahead to economic reports including weekly jobless claims and the New York Fed Survey of Consumer Expectations. Earnings reports are also due from ConocoPhillips, Warner Bros. Discovery, and Paramount Global. In extended trading, AppLovin jumped 13% after beating expectations, while Arm Holdings dropped 11% after issuing disappointing guidance.

Asia-Pacific markets live: Fed, Bank Negara Malaysia

08-05-2025

Asia-Pacific markets traded mixed after the US Federal Reserve kept interest rates unchanged. Japan's Nikkei 225 rose 0.25%, while South Korea's Kospi gained 0.21%. Hong Kong's Hang Seng index increased 0.24%, and mainland China's CSI 300 was flat. The Fed's decision was expected, but Chair Jerome Powell warned that significant tariff hikes could slow economic growth and increase long-term inflation. Investors are awaiting updates on US-China trade talks, with US Treasury Secretary Scott Bessent set to meet with his Chinese counterpart in Switzerland. US futures were relatively unchanged, with S&P 500 futures down 0.1%. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average closed higher on Wednesday. Other news includes China's central bank cutting its 7-day reverse repo rate, LG Electronics setting up a $600 million factory in India, and Philippines GDP growing 5.4% in the first quarter.

Investors’ risky bet: they can shrug off the trade war

08-05-2025

Despite a month of market turmoil following Donald Trump's "Liberation Day" proclamation, investors in American stocks are largely shrugging off the trade war, with the S&P 500 index down only 2.4%. Stocks remain about 10% below their all-time high in February, but analysts still expect 12% annual earnings growth, and the market is not pricing in a recession or trade catastrophe.