Tech earnings from industry giants Oracle and Broadcom are also in focus, amid lingering concerns that last month’s AI-fueled trading frenzy may have created an overheated market.
Investors are watching closely as US central bankers are expected to cut interest rates for a third consecutive session. Attention is on the Fed’s post-meeting statement, Chair Jerome Powell’s news conference, and the “dot plot” forecast for 2026 monetary policy.
After a sharp tech-led pullback in November, markets had rebounded in recent weeks, aided by weaker-than-expected job figures that reinforced expectations of lower borrowing costs. However, these gains cooled ahead of the Fed gathering amid speculation the central bank could announce a “hawkish cut,” signaling fewer rate reductions than previously anticipated.
Data on Tuesday showing an uptick in US job openings, contrary to expectations for a decline, tempered projections for multiple rate cuts next year. Market pricing now anticipates two reductions over the next 12 months, down from three previously expected. “The figures catalyzed a repricing of US forward Fed rate expectations,” said Chris Weston of Pepperstone.
Following the weak session in New York, where the S&P 500 and Dow Jones Industrial Average fell, Asian markets also faced pressure. Tokyo, Sydney, Singapore, Seoul, Mumbai, Wellington, Jakarta, and Manila closed lower, while Hong Kong and Taipei managed modest gains. Shanghai dipped despite data showing China’s consumer prices rose last month at their fastest pace in almost two years, signaling an end to a prolonged deflationary period.
European indices opened lower, with London, Paris, and Frankfurt all in the red.
Despite cautious sentiment, some optimism remains that the Fed could adopt a more dovish stance next year. Kevin Hassett, President Donald Trump’s top economic aide and frontrunner to succeed Powell in May, has indicated support for additional easing if needed. “On the current backdrop, he is comfortable with more easing than many board members,” noted Taylor Nugent of National Australia Bank.
Alongside the Fed developments, investors are eyeing earnings reports from Oracle and Broadcom, which are expected to provide insights into the tech sector’s outlook, particularly in AI-driven investments. “Oracle may not have a substantial weight in the S&P 500 or NAS100 to move the index on its own, but its capital expenditure plans could resonate across the AI space,” said Weston.
Market Snapshot (around 0815 GMT)
- Tokyo – Nikkei 225: DOWN 0.1% at 50,602.80
- Hong Kong – Hang Seng: UP 0.4% at 25,540.78
- Shanghai – Composite: DOWN 0.2% at 3,900.50
- London – FTSE 100: DOWN 0.1% at 9,629.99
Currency Movements
- Dollar/yen: DOWN at 156.68 yen (from 156.90)
- Euro/dollar: UP at $1.1643 (from $1.1630)
- Pound/dollar: UP at $1.3322 (from $1.3300)
Oil Prices
- WTI: UP 0.2% at $58.36 per barrel
- Brent: UP 0.2% at $62.06 per barrel
US Indices
- Dow: DOWN 0.4% at 47,560.29