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A city view seen from the Azabudai Hills Mori JP Tower in the Minato district of Tokyo, Japan on November 24, 2023.
Ahmet Furkan | Anadolu | Getty Images
Asia-Pacific markets are poised for a mixed open on Thursday following broad declines on Wall Street as the U.S. Federal Reserve cut borrowing rates for the third consecutive meeting while signaling fewer rate cuts ahead.
Investors in Asia also await a interest rate decision by the Bank of Japan after its two-day policy meeting. The central bank is expected to leave its target rate unchanged at 0.25%.
The Japanese yen strengthened slightly on Thursday morning at 154.57 against the greenback.
Japan's benchmark Nikkei 225 is set to open lower, with the futures contract in Chicago at 38,665 and its counterpart in Osaka at 38,470 against the index's last close of 39,081.71.
Australia's S&P/ASX 200 started the day down 0.64%.
Meanwhile, futures for Hong Kong's Hang Seng index stood at 19,873, pointing to a stronger open compared to the HSI's close of 19,864.55.
Overnight in the U.S., the Dow Jones Industrial Average tanked by 1,123.03 points, or 2.58%, to 42,326.87, posting its first 10-day losing streak since 1974. The broad-based S&P 500 dropped 2.95% to 5,872.16 and the Nasdaq Composite lost 3.56% to 19,392.69.
The sell-off on Wall Street came after the central bank lowered its overnight borrowing rate by 25 basis points to a target range of 4.25% to 4.5%. While the cut was widely anticipated, the Fed indicated there will only be two rate cuts in 2025, fewer than the four cuts in its previous forecast.
"We moved pretty quickly to get to here, and I think going forward obviously we're moving slower," Fed Chair Jerome Powell said at the post-meeting press conference.
— CNBC's Brian Evans, Lisa Kailai Han contributed to this report.
Fed cuts rates as expected, but signals less reductions next year
The Federal Reserve trimmed its overnight borrowing rate by 25 basis points on Wednesday, in a widely anticipated move.
This brings the Fed's borrowing rate to a target range of 4.25% to 4.5%. However, the central bank indicated it would likely only cut rates twice in 2025, according to its closely watched "dot plot," down from four cuts given in its last forecast.
— Brian Evans
Market-moving Powell quotes so far
U.S. Federal Reserve Chair Jerome Powell speaks during a press conference where he announced the Fed had cut interest rates by a quarter point following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, U.S., Dec. 18, 2024.
Kevin Lamarque | Reuters
Federal Reserve Chairman Jerome Powell addressed the press after the central bank disappointed the market by forecasting just two rate cuts next year.
Here are some of the key quotes by Powell during his press conference so far:
- "With today's action, we have lowered our policy rate by a full percentage point from its peak, and our policy stance is now significantly less restrictive. We can therefore be more cautious as we consider further adjustments to our policy rate."
- "I think the actual cuts that we make next year will not be because of anything we wrote down today. We're going to react to data; that's just the general sense of what the committee thinks is likely to be appropriate."
- "I would say today was a closer call, but we decided it was the right call because we thought it was the best decision to foster achievement of both of our goals."
- "As we think about further cuts, we're going to be looking for progress on inflation... We have been moving sideways on 12-month inflation."
Follow our Fed live blog for more.
—John Melloy
Dollar index poised for highest closing since 2022
The Dollar Index is on track to end Wednesday at its highest closing level in more than two years.
The index last traded around the 108 level. With that action, the index could conclude at its highest closing point since Nov. 10, 2022, when it finished at 108.21.
— Alex Harring, Nick Wells
All 11 S&P 500 sectors on track to close lower
The selloff was broad-based, with all 11 S&P 500 sectors trading in negative territory following the Federal Reserve's decision to cut interest rates by a quarter point.
The pullback was led by consumer discretionary and real estate, with those sectors falling around 4% and about 2.9%, respectively. Information technology and communication services were each down around 2.4%, while financials, materials and industrials were lower by around 2%.
Moreover, about nine out of every 10 S&P 500 members were on track to end the session in the red.
— Sean Conlon, Alex Harring
Stocks close lower
Stocks closed lower on Wednesday, with the Dow Jones Industrial Average notching its first ten-day losing streak since 1974, after Federal Reserve Chair Jerome Powell signaled less rates in 2025 than previously forecast.
The 30-stock Dow plummeted 1,123.03 points, or 2.58%, to close at 42,326.87. The S&P 500 pulled back 2.95% to 5,872.16, while the Nasdaq Composite finished the session 3.56% lower at 19,392.69.
— Brian Evans
CNBC Pro: Wall Street has mixed feelings toward European stocks for 2025. Here are their big calls
Major investment banks are presenting varied outlooks for European equities in 2025, with predictions ranging from modest gains to significant upside potential, amid concerns about global growth and trade tensions.
CNBC Pro has compiled views from Goldman Sachs, Barclays, Deutsche Bank, JPMorgan, Bank of America and UBS on the outlook for Stoxx 600 and other indexes for 2025.
CNBC Pro subscribers can read more here.
— Ganesh Rao
English (US)