Global Markets: Stock Prices Decline as Investors Await Fed Decisions

On Wall Street, stock prices fell on Tuesday, with the Dow Jones index sliding for the ninth consecutive day as investors await decisions and messages from the meeting of the leaders of the U.S. central bank.

The Dow Jones weakened by 0.61 percent to 43,449 points, while the S&P 500 slipped 0.39 percent to 6,050 points, and the Nasdaq index fell 0.32 percent to 20,109 points.

Thus, the Nasdaq has slipped from its record level, while the Dow Jones has fallen for the ninth consecutive day, a streak not seen since 1978.

Investors are cautious as a two-day meeting of Fed leaders began yesterday, with their decisions to be announced on Wednesday.

Investors will also focus on their new macroeconomic forecasts, as well as a press conference by central bank president Jerome Powell. The market expects the Fed to cut rates for the third time this year by an additional 0.25 percentage points, but it is uncertain what will happen next with interest rates.

Data released yesterday on retail sales showed that American consumer spending is rising, indicating that the economy has solid support, but also that inflation could remain elevated.

Moreover, the policies of newly elected U.S. President Donald Trump could support economic growth and inflation. For these reasons, Powell, along with several other Fed leaders, has indicated in recent weeks that the pace of rate cuts may need to slow down.

Powell is likely to reiterate this on Wednesday, and his comments regarding inflation and the economic situation are also anticipated.

On most European exchanges, stock prices also fell yesterday. The London FTSE index weakened by 0.81 percent to 8,195 points, while the Frankfurt DAX fell by 0.33 percent to 20,246 points. The Paris CAC, on the other hand, strengthened by 0.12 percent to 7,365 points.

Most Asian Markets Rise

On most Asian exchanges, stock prices rose on Wednesday, while the value of the dollar against a basket of currencies stagnates ahead of decisions and messages from the leaders of the U.S. central bank.

The MSCI Asia-Pacific index was up 0.2 percent at 7:00 AM. Meanwhile, on the Tokyo Stock Exchange, the Nikkei index fell by 0.5 percent, while stock prices in Australia slipped by 0.1 percent. In Shanghai, Hong Kong, and South Korea, however, they rose between 0.8 and 1.3 percent.

Stock prices in South Korea rose as investors hope for stabilization of the political scene after the president, who recently caused a political crisis by declaring and then lifting a state of emergency, was removed over the weekend.

Chinese markets rose as investors hope for new monetary and fiscal stimulus measures, given that the economy is growing slower than expected. Decisions from the leaders of the Chinese central bank regarding interest rates will be announced on Friday.

Dollar Stagnates, Oil Prices Slightly Rise

In the currency markets, the value of the dollar against a basket of currencies stagnates.

The dollar index, which shows the value of the U.S. dollar against the other six major world currencies, is around 106.89 points this morning, almost the same as yesterday at this time. Meanwhile, the dollar’s exchange rate against the Japanese currency slipped from yesterday’s 154.10 to 153.60 yen.

However, the U.S. currency has slightly strengthened against the European currency, causing the price of the euro to fall to 1.0505 dollars, down from 1.0510 dollars yesterday at the same time.

Oil prices, on the other hand, have slightly risen. The price of a barrel on the London market strengthened by 0.10 percent to 73.25 dollars, while on the U.S. market, a barrel increased by 0.14 percent to 70.20 dollars.