Wall Street's Vigor Might Persist Due to Anticipated Interest Rate Decreases
Headline: Seoul Stocks Rally, US Markets Poised for Gain as Fed Rate Cut Looms
Seoul's tech sector led a rally in the city's stocks on Wednesday, with the Kospi jumping 1.1 percent. Samsung Electronics rose 1.1 percent, and SK Hynix jumped 3.4 percent. This surge follows a similar trend in Japanese markets, which reached a fresh record high, extending a rally to a sixth straight session.
Across the Pacific, U.S. index futures are indicating a modestly higher open on Wednesday. The likelihood of a Federal Reserve interest rate cut in September 2025 is very high, with market-implied probabilities ranging from about 80% to over 90%.
Fed Chair Jerome Powell's recent speech at the Jackson Hole symposium signaled openness to cutting rates if economic data, especially on inflation and employment, justifies it. The Fed's stance now seems more inclined toward a cautious rate cut to support economic growth if labor market weakness materializes.
The potential impact on the U.S. stock market is generally positive in the short term. Stock prices, especially in rate-sensitive sectors like housing, small-cap stocks, and financials, would likely rally on a rate cut due to lower borrowing costs and increased risk appetite.
In Europe, stocks have moved mostly higher on Wednesday. Tour operator TUI gained 2.6 percent after beating its quarterly earnings forecast. Asics soared 18 percent after raising its full-year forecast. However, British homebuilder Persimmon tumbled 3.3 percent as it cautioned on market headwinds and budget uncertainty.
Meanwhile, Australian markets fell notably. The benchmark S&P/ASX 200 Index dropped 0.6 percent. Infrastructure contractor Balfour Beatty lost 3.6 percent despite reporting strong financial results for the first half of 2025.
Elsewhere, LG Display soared 22.5 percent on news of its victory in a trade secret infringement lawsuit against Chinese BOE. Tank gearbox maker RENK Group climbed 2.8 percent after posting stronger-than-expected second-quarter results.
The annual rate of growth by consumer prices in July was unchanged at 2.7% in the UK, while German consumer price inflation remained stable at an annual increase of 2.0 percent. The core consumer price index, which excludes food and energy prices, climbed by 0.3% in July in the US.
The Fed is widely expected to lower rates by at least a quarter point next month. President Donald Trump has been pressuring Fed Chair Jerome Powell to lower rates. U.S. Treasury Secretary Scott Bessent wants the Fed to consider a larger, 50 basis point rate cut next month.
However, some caution exists about a possible bond market backlash or concerns that cutting rates too soon could undermine the Fed’s credibility or precipitate inflation rebounds, which might limit further gains. The Fed will remain data-dependent, so ongoing economic indicators will influence this outcome and market response.
In summary, an interest rate cut in September 2025 is strongly expected based on current Fed signals and market data, and it is poised to spur a rally in the U.S. stock market, particularly in sectors sensitive to interest rates. The Fed will remain data-dependent, so ongoing economic indicators will influence this outcome and market response.
Read also:
- Catastrophe at a U.S. Steel facility in Pennsylvania results in the loss of two lives. crucial details unveiled
- Manipulating Sympathy: Exploiting Victimhood for Personal Gain
- Auto Industry Updates: Geotab, C2A, Deloitte, NOVOSENSE, Soracom, and Panasonic in Focus
- Exploring Money-Making Opportunities in Digital Gaming Worlds
