TOKYO — Global stock markets exhibited predominantly negative trends as investors reacted to a mixed closing on Wall Street.
In early European trading, France’s CAC 40 registered a modest gain of 0.3%, climbing to 7,429.55, while Germany’s DAX rose 0.4% to 18,340.84. Conversely, Britain’s FTSE 100 experienced a decline of 0.4%, falling to 8,202.70. U.S. stock futures indicated a downward movement, with Dow futures reaching 40,667.00, down 0.3%, and S&P 500 futures also falling by 0.3% to 5,488.50.
Investor attention is primarily focused on the upcoming debate between U.S. presidential candidates, Vice President Kamala Harris and former President Donald Trump, and its potential impact on the market.
Historically, when expectations for a Trump reelection have increased, the value of the U.S. dollar has strengthened due to a phenomenon dubbed the “Trump trade,” which includes his advocacy for tariffs.
In the currency markets, the U.S. dollar slipped to 141.66 Japanese yen, down from 142.41, while the euro traded at $1.1045, a slight increase from $1.1023. The dollar briefly dropped to around the 140-yen level following comments from a Japanese central bank official suggesting a potential interest rate hike by the Bank of Japan, a long-anticipated move.
Japan’s Nikkei 225 fell by 1.5% to close at 35,619.77, and Australia’s S&P/ASX 200 decreased by 0.3% to 7,987.90. South Korea’s Kospi declined by 0.4% to 2,513.37, influenced by new data showing the nation’s unemployment rate dropping to 2.4% in August 2024 from 2.5% in July, marking the lowest level in a year.
In Hong Kong, the Hang Seng index dipped 0.7% to 17,108.71, while the Shanghai Composite noted a decrease of 0.8% to 2,721.80.
The U.S. Federal Reserve is shifting its strategies from combating high inflation to safeguarding the economy, leading to discussions about the anticipated reduction of the federal funds rate, which is currently at a two-decade high.
Upcoming reports on U.S. inflation are expected to influence the extent of the Fed’s rate cuts. A scenario in which inflation could rebound while the job market weakens would pose challenges, necessitating conflicting monetary policy actions.
Economists predict that the latest inflation report will reveal a 2.6% increase in consumer prices for August compared to the previous year, a decline from July’s rate of 2.9%.
In the energy sector, benchmark U.S. crude prices increased by $1.20, reaching $66.95 per barrel, while Brent crude rose by $1.11 to $70.30 per barrel.
