Global Markets React to Fed Decision, Trade Talks

Asia-Pacific markets traded mixed after the U.S. Federal Reserve kept interest rates unchanged. The Federal Open Market Committee held its benchmark overnight borrowing rate between 4.25% to 4.5%. Fed Chair Jerome Powell warned that significant tariff hikes could lead to a slowdown in economic growth and an uptick in long-term inflation. Investors are awaiting updates on upcoming U.S.-China trade talks. Other news includes Auntea Jenny's successful Hong Kong IPO, India's resilient economy, and LG Electronics' $600 million factory in India.

China's latest stimulus measures, including interest rate cuts and liquidity injection, failed to boost its stock market as investors focused on upcoming U.S.-China trade talks and concerns over economic deterioration. Analysts say more targeted fiscal measures are needed to prop up the real estate sector and boost consumer sentiment.

The U.S. Federal Reserve kept interest rates steady and warned that Trump's tariffs could lead to stagflation, characterized by higher inflation, slower economic growth, and increased unemployment. Despite this warning, it's unlikely that Trump will heed the Fed's caution. Meanwhile, Britain is set to be the first country to sign a trade deal with the U.S., and the Trump administration is preparing to rescind a Biden-era rule restricting AI chip exports. U.S. stocks rose on the news, with Disney and Nvidia shares jumping significantly. Apple services chief Eddy Cue believes AI search engines will replace standard ones like Google.

The stock market saw a mixed reaction to the Federal Reserve's decision to hold interest rates steady, with the S&P 500 and Nasdaq Composite rising slightly, while investors await upcoming economic reports and earnings releases from major companies. The Fed highlighted rising inflation and unemployment risks, and Chair Jerome Powell dismissed the idea of a preemptive rate cut. Investors are now looking ahead to weekly jobless claims data and the New York Fed Survey of Consumer Expectations.