Reuters
- US futures rose on Wednesday, fueled by expectations of the Federal Reserve cutting interest rates for the first time in a decade.
- However, Asian stocks fell and European stocks were mixed after Donald Trump accused China of undermining trade talks, dashing hopes for a deal.
- "That is the problem with China, they just don’t come through," the US president tweeted. "My team is negotiating with them now, but they always change the deal in the end to their benefit."
- If the US central bank pulls the trigger on a rate cut, it will likely "set the tone for policy easing out of other major central banks," one analyst said.
- View Markets Insider’s homepage for more stories.
US futures rose on Wednesday, fueled by expectations of the Federal Reserve cutting interest rates for the first time in a decade. However, Asian stocks fell and European stocks were mixed after Donald Trump accused China of undermining trade talks, dashing hopes for a deal.
Traders expect the Fed to cut interest rates by 0.25% today, with an outside chance of a 0.5% cut. Whether the central bank follows through is likely to "set the tone for policy easing out of other major central banks," said Han Tan, a market analyst at FXTM.
Fed Chair Jerome Powell’s forward guidance might be more important than the cut itself. The prospect of a single cut "will not bode well for the stock markets but if the door stays open for more action later in the year, then equities will soar," said Konstantinos Anthis, head of research at ADSS.
The US president accused the Asian nation of reneging on its commitment to ramp up purchases of US agricultural products. "That is the problem with China, they just don’t come through," he tweeted. "My team is negotiating with them now, but they always change the deal in the end to their benefit."
Trump’s critical rhetoric is "slaughtering investors’ hopes for progress at the first face-to-face meeting between the US and China since May," said Ipek Ozkardeskaya, a senior market analyst at London Capital Group. "His untimely tweets confirmed once again his reluctance to get a trade deal done in the foreseeable future."
North Korea’s firing of two ballistic missiles, its second launch in the past week, also weighed on Asian markets.
Here’s the market roundup as of 9:30 a.m.:
Asian stocks closed lower with China’s Shanghai Composite down 0.7%, Japan’s Nikkei down 0.9%, and Hong Kong’s Hang Seng down 1.2%.
European equities were mixed with Germany’s DAX up 0.2%, the Euro Stoxx 50 up 0.1%, and Britain’s FTSE 100 down 0.3%.
US stocks are poised for a positive open. Futures underlying the Dow Jones Industrial Average, S&P 500, and Nasdaq were up between 0.2% and 0.4%.
Oil prices were higher with West Texas Intermediate crude up 0.3% at $58.20, and Brent crude up 0.6% at $65.
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Source: Business Insider – tmohamed@businessinsider.com (Theron Mohamed)