Global stocks vary after US rate increase

The global financial markets were affected following the decision of the U.S. Federal Reserve to keep interest rates steady within the range of 3.5% to 3.75%. The decision was accompanied by a vote from three members to raise rates by a quarter of a percentage point, which increases the likelihood of future rate hikes. Major U.S. stock indices declined, with the S&P 500 falling by 1.5%, the Dow Jones Industrial Average dropping by 2.2%, and the Nasdaq declining by 1.7%. These movements reflect expectations of continued rising borrowing costs and the impact of high inflation, especially amid rising oil prices. Meanwhile, tech company results such as Microsoft bolstered confidence with growth in cloud computing revenues, whereas Meta faced pressures due to high capital expenditure forecasts and legal costs. In Asia, strong earnings expectations from Japanese tech firms led to gains in the Nikkei and TOPIX indices, despite declines in automobile and banking stocks. In Europe, markets rose supported by positive corporate earnings and improved profit outlooks, notably for Rolls-Royce and Shell. Overall, inflation and the Federal Reserve’s future decisions remain the primary drivers of market trading, with investors closely watching for hikes or holds in interest rates in the coming months.

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