Asian Markets Dip After Fed Holds Rates Steady
Key Points:
* Asian stocks poised to follow U.S. peers lower after the Federal Reserve (Fed) maintained interest rates.
* Equity futures in Australia and Japan decline due to cautious market sentiment.
* Tech earnings in focus as Tesla climbs on sales growth forecast, Meta rebounds, and Microsoft slips.
* Fed commits to keeping rates elevated despite removing language indicating progress towards inflation goal.
* Bank of Canada cuts rates, but provides no guidance on further adjustments.
* Reserve Bank of Australia and Bank of Japan officials' speeches to be closely watched for policy signals.
* Earnings season kicks off with a focus on megacap tech firms and their investments in artificial intelligence.
* Oil prices fall amid uncertainty over potential tariffs on Canada and Mexico.
Detailed Summary:
Asian stock markets are set to decline on Thursday, tracking the downward trend in U.S. markets after the Fed's decision to keep interest rates unchanged. The Fed's statement removed previous references to progress towards its 2% inflation target, indicating a cautious stance on lowering rates despite expectations in the market.
Equity futures in Australia and Japan have fallen, while major Asian markets, including Hong Kong and mainland China, remain closed for the Lunar New Year holiday.
In the U.S., tech earnings have taken center stage. Tesla has climbed on expectations of increased vehicle sales, Meta has recovered after initial losses, and Microsoft has slipped due to slowed cloud growth. International Business Machines Corp. has surged on strong sales and profit.
The Fed's decision to maintain rates has sparked mixed reactions. The yield on 10-year Treasuries has remained largely unchanged, while the Bloomberg Dollar Spot Index has remained stable.
In Asia, focus will shift to the Reserve Bank of Australia and Bank of Japan. Reserve Bank of Australia Assistant Governor Brad Jones will speak later Thursday, and Bank of Japan Deputy Governor Ryozo Himino will deliver a speech on Thursday.
Investors will be scrutinizing these speeches for clues on future policy moves, particularly in light of the Fed's recent decision.
Earnings season is also underway, with investors closely monitoring the performance of tech giants. Growth among the "Magnificent Seven" tech behemoths is expected to slow to the lowest pace in almost two years.
In commodities, oil prices have fallen after President Donald Trump's pick for Commerce Secretary suggested that tariffs on Canada and Mexico may not be implemented as soon as expected.