Global Stocks Rebound as Powell Hints at More US Rate Cuts
Global equities regained ground on Wednesday after Federal Reserve Chair Jerome Powell signalled that further US interest rate cuts could be on the way, helping to steady markets rattled by renewed US-China trade tensions.
Mr Powell said the Fed remained open to additional policy easing and that the end of its long-running effort to reduce its balance sheet “may be coming into view.” His comments, combined with solid earnings from US banking giants and an upward revision of the IMF’s 2025 global growth forecast, helped lift sentiment following heavy losses earlier in the week.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.4%, while Japan’s Nikkei 225 climbed 1.5%, rebounding after Tuesday’s 2.6% drop.
On Wall Street, markets endured a volatile session on Tuesday as investors digested Powell’s remarks alongside fresh trade tensions. The S&P 500 fell as much as 1.5% intraday but pared losses to close down 0.2%, after Donald Trump said on Truth Social he may halt trade in cooking oil with China “in retribution” for Beijing’s reduced soybean purchases.
The Nasdaq Composite ended down 0.8%, while the Dow Jones Industrial Average edged 0.4% higher, supported by strength in financial and industrial stocks.
Powell’s suggestion of a possible October rate cut, amid signs of a cooling US labour market, was welcomed by investors seeking clarity on the Fed’s path ahead.
