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On Thursday, Asian stock markets experienced a rise, following the largest single-day drop on Wall Street in two months, due to revelations from a Federal Reserve meeting that indicated officials plan to maintain US interest rates to counteract potential inflation. The Shanghai Composite Index gained 0.1%, and the Hang Seng in Hong Kong rose 0.5%. The Kospi in Seoul increased by 1%, while Sydney’s S&P/ASX 200 dropped 0.3%. New Zealand’s NZ50GR gained 0.8%, Taiwan rose 1.28%, and Indonesia gained 0.43%, but Singapore and Malaysia experienced declines of 1.06% and 0.43%, respectively.
Japanese markets were closed for a holiday.
On Wednesday, Wall Street experienced a decline after notes from the Federal Reserve’s latest board meeting revealed that board members expect to continue increasing its key lending rate to slow down the economy, thereby lowering hopes that cuts might happen as early as the end of the year.
Amid concerns over the Federal Reserve’s policy and potential recession, stocks experienced a decline on Thursday, continuing the fading trend of the early year rally. The S&P 500 experienced a 0.1% decrease, and the Dow Jones Industrial Average dropped by 0.3% or 109 points, while the Nasdaq Composite fell less than 0.1%. Despite starting the day on a high note with Nvidia’s strong earnings, Thursday’s declines have put the major averages down over 2% for the week and set the S&P 500 on a path for its fifth consecutive loss.
After rallying over 6% in January, the S&P 500 is only up 3.6% for the year. These market movements followed the Federal Reserve’s release of minutes from its latest meeting on February 1, which showed that the central bank intends to continue fighting inflation with rate hikes.
On Thursday, gold prices dropped to their lowest point in about two months due to a decrease in weekly jobless claims in the US, which favored the Federal Reserve’s stance that higher interest rates would be necessary to control inflation. As of 12:33 p.m. ET (1733 GMT), spot gold was down 0.2% at $1,821.34 per ounce, having reached its lowest level since December 30 earlier in the day, while US gold futures fell 0.7% to $1,828.70.
The unexpected decrease in Americans filing for unemployment benefits last week suggested a tight labor market and inflationary pressures, further supporting the Fed’s stance. While the country’s gross domestic product increased at a revised 2.7% annualized rate in the fourth quarter of 2022, which was lower than the previously reported 2.9%, the drop in jobless claims keeps the Federal Reserve in control of raising rates, according to Bob Haberkorn, a senior market strategist at RJO Futures.
The above analysis is only for the views of market researchers and is for reference only and is not regarded as a specific investment suggestion.