Global Markets React to Fed's Rate Cut with Mixed Signals

Global stock markets faced heightened volatility on Thursday following the Federal Reserve's latest decision to cut interest rates. The Fed's cautious approach to future monetary policy left investors uncertain about the pace of future rate cuts. This uncertainty led to a 0.3% decline in MSCI's index of Asia-Pacific shares outside Japan, mainly influenced by setbacks in Australian and New Zealand markets, while Chinese stocks fluctuated between gains and losses.

Some markets showed resilience despite the volatility. U.S. equity futures rose by 0.4% after earlier losses on Wall Street, and markets in South Korea and Taiwan saw gains of 1.2% and 1.3%, respectively. Meanwhile, Japan's Nikkei 225 increased by 1.2% as global stocks regrouped following the Fed's rate cut and signals of potential further easing measures later in the year.

Currencies also reacted to the Fed's decision, as the U.S. dollar rebounded 0.3% following a drop to its lowest level since February 2022. The euro and the Chinese yuan experienced similar fluctuations, while the Bank of England and the Bank of Canada are poised for their own potential rate adjustments. Concerns over growth persisted, as New Zealand's economic contraction and Australia's labor market data painted a mixed picture for the broader economic outlook.

(With inputs from agencies.)