Global markets mixed after Fed leaves rates unchanged

ISTANBUL

Global markets are on a mixed course following the Fed’s decision to leave rates unchanged Wednesday at 4.25% to 4.50%, within estimates, while the US central bank’s unchanged forecast for the federal funds rate showed two possible rate cuts this year are still on the table.

The Fed said the US unemployment rate stabilized at a low level in recent months and labor market conditions remain strong, though inflation remains somewhat high.

“Beginning in April, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion,” according to a Federal Open Market Committee (FOMC) statement Wednesday.

Fed Chair Jerome Powell said tariffs could delay the progress in fighting inflation, despite the generally strong economy and robust labor market conditions. He noted that inflation is reaching the 2% long-term target.

The US 30-year mortgage, meanwhile, increased to 6.72% last week, marking the first rise in nine weeks, while applications fell 6.2%.

At the same time, electric vehicle (EV) maker Tesla’s shares climbed 3% Wednesday after it received its first approval from California state regulators for a robotaxi permit in the state.

Chipmaker Nvidia unveiled a new artificial intelligence (AI) chip built on the Blackwell Ultra architecture, as well as the GB300 superchip which uses two Blackwell Ultra dies, to investor optimism at the GPU Technology Conference (GTC) keynote. Nvidia shares enjoyed a nearly 2% rise following the announcement.

The US 10-Year Futures bond was at 4.24% and the US Dollar Index stabilized at 103.4 on a flat course Wednesday.

Gold climbed 0.4% to $3,045 an ounce Wednesday amid rising geopolitical risks and uncertainties in the global economy. The price saw a record of $3,056 before ending the day. Gold is currently trading at $3,048, up 0.1%.

Brent crude oil rose 0.3% to $70.8 per barrel due to growing tensions in the Middle East.

The S&P 500 rose 1.08%, the Nasdaq 1.41% and the Dow 0.92%, while starting Thursday on a positive course.

European stock markets were mixed Wednesday amid the Bank of England (BoE) monetary policy decision to be announced Thursday.

The BoE is certain to keep its policy rate unchanged at 4.5%.

BoE Governor Andrew Bailey and European Central Bank (ECB) President Christine Lagarde are expected to make a statement Thursday.

The eurozone Consumer Price Index (CPI) fell to 2.3% year-on-year but climbed 0.4% on a monthly basis in February, below estimates, according to data released Wednesday.

Analysts said the eurozone’s below estimates on inflation data gave rise to confidence in the disinflation process of the region, while the US tariffs’ effect on the region’s inflation is still on the agenda.

At the same time, the DAX 40 fell 0.4%, while the CAC 40 climbed 0.7%, the FTSE MIB 30 0.34% and the FTSE 100 remained flat, while starting Thursday on a mixed course.

In Asia, China’s one and five-year Loan Prime Rates (LPR) remained unchanged at 3.1% and 3.6%, respectively.

Beijing supported talks between Trump and Russian President Vladimir Putin on the ceasefire in Ukraine.

The Hang Seng Index fell 1.1% and the Shanghai Composite Index 0.1%, while the Kospi Index climbed 0.4%. Japanese markets are closed due to a national holiday observing the Vernal Equinox.