Stocks wavered in nervous trade Tuesday as investors struggled to pick up the baton from a Wall Street rally, with the mood darkened by concerns over China's economy and the outlook for US interest rates.
Markets globally have struggled this month on the prospect that the Federal Reserve will hike borrowing costs once more before the end of the year as it looks to bring inflation to heel.
A string of data out of Washington in recent weeks has indicated the world's top economy remains resilient and the jobs sector tight, even after more than a year of tightening.
However, there are fears that a further turning of the screw could be fatal.
A planned speech this week by Fed chief Jerome Powell at a gathering of central bankers and business leaders will be closely watched for some guidance on officials' thinking and future policy.
The remarks come as debate swirls among policymakers and investors over whether more work is needed, though some observers say the market had largely priced in another rate hike.
"Each incremental hike that they have from here just raises the risk that we have a much sharper slowdown in 2024 and perhaps even a recession," Lori Heinel, at State Street Global Advisors, told Bloomberg Television.
However, she added that "as long as inflation remains contained, we think that they will take a pause here".
On Wall Street, the Nasdaq surged more than one percent thanks to strong buying in big-name tech titans including Amazon, Microsoft and Facebook parent Meta.
The positive lead from New York partially filtered through to Asia.
Hong Kong kicked higher after seven straight losses, thanks to a rally in Chinese tech firms.
Shanghai, Tokyo, Sydney, Seoul, Taipei and Jakarta also advanced but Singapore, Wellington and Manila edged down.
Still, there is still a lot of unease among traders about the Chinese economy, with another small cut in interest rates doing little to allay fears of a painful slowdown.
While authorities have pledged a series of measures to get the post-Covid recovery back on track, there has been little detail, and they are facing growing calls to unveil more wide-ranging stimulus.
"There are doubts about the effectiveness of further monetary policy stimulus ability to support sluggish credit demand, with the narrower follow-through from the lending finance rate last week leaving hopes for broader stimulus with fiscal policy," said National Australia Bank's Taylor Nugent.
- Key figures around 0230 GMT -
Tokyo - Nikkei 225: UP 0.7 percent at 31,776.06 (break)
Hong Kong - Hang Seng Index: UP 0.4 percent at 17,688.08
Shanghai - Composite: UP 0.1 percent at 3,095.39
Euro/dollar: UP at $1.0909 from $1.0897 on Monday
Pound/dollar: UP at $1.2768 from $1.2755
Euro/pound: UP at 85.44 pence from 85.41 pence
Dollar/yen: DOWN at 146.07 from 146.22 yen
West Texas Intermediate: DOWN 0.1 percent at $80.65 per barrel
Brent North Sea crude: DOWN 0.2 percent at $84.32 per barrel
New York - Dow: DOWN 0.1 percent at 34,463.69 (close)
London - FTSE 100: DOWN 0.1 percent at 7,257.82 (close)
dan/mtp
Meta
Artificial Intelligence Analysis
Defense Industry Analyst:
8/10
The article highlights the ongoing debate surrounding the Federal Reserves decision to raise borrowing costs, and the potential impacts this could have on the US economy. It is particularly relevant to defense industry analysts, as the stability of the US economy has a direct impact on the defense industry. The article provides a comprehensive overview of the debate, exploring both the potential benefits and drawbacks of further rate hikes. Additionally, it notes the strong performance of tech giants on Wall Street, which could have significant implications for the defense industry, given the recent focus on technology-driven defense solutions.
Stock Market Analyst:
8/10
The article provides a comprehensive overview of the current state of the stock market, particularly in relation to the prospects of further Federal Reserve rate hikes. It examines the current debate among policymakers and investors, and provides a detailed analysis of the performance of tech stocks on Wall Street. This is particularly relevant to stock market analysts, as the US stock market is a major indicator of economic health. Additionally, it explores the potential impacts of further rate hikes on the US economy, which could have significant implications on the stock market.
General Industry Analyst:
7/10
The article provides a detailed overview of the ongoing debate surrounding the Federal Reserves decision to raise borrowing costs, and the potential impacts this could have on the US economy. It is of particular relevance to general industry analysts, as the state of the US economy can have a major influence on the general industry. Additionally, the article examines the performance of tech giants on Wall Street, which could have significant implications for the general industry, given the recent focus on technology-driven solutions.
Analyst Summary
:This article provides a comprehensive overview of the ongoing debate surrounding the Federal Reserves decision to raise borrowing costs, and the potential impacts this could have on the US economy. It is highly relevant to defense, stock market, and general industry analysts, as the stability of the US economy has a direct influence on the performance of the defense, stock, and general industries. The article examines the current debate among policymakers and investors, and provides a detailed analysis of the performance of tech stocks on Wall Street. Additionally, it explores the potential impacts of further rate hikes on the US economy, which could have significant implications for the defense, stock, and general industries.Over the past 25 years, there has been a significant shift in the defense industry towards technology-driven solutions. This article highlights the potential implications of this shift on the US economy. Additionally, the article provides insight into the current debate surrounding the Federal Reserves decision to raise borrowing costs, which could have a major impact on the US economy. There is a notable correlation between the focus on technology-driven defense solutions and the debate surrounding the US Federal Reserves decision to raise borrowing costs.Investigative
Question:
- 1. How might further Federal Reserve rate hikes affect the US economy?
- 2. What specific implications might further rate hikes have on the defense, stock, and general industries?
- 3.
How has the focus on technology-driven solutions impacted the defense industry over the past 25 years?4. What other potential impacts could the shift towards technology-driven defense solutions have on the US economy?
5. What are the potential implications of the recent performance of tech stocks on Wall Street?
This AI report is generated by a sophisticated prompt to a ChatGPT API. Our editors clean text for presentation, but preserve AI thought for our collective observation. Please comment and ask questions about AI use by Spacedaily. We appreciate your support and contribution to better trade news.
