After U.S. equities surged to almost their all-time high as investors took into account remarks made by Federal Reserve Chair Jerome Powell to Congress, BANGKOKAsian markets saw slight gains.
With optimism that Israel’s war with Iran won’t impede the world’s supply of petroleum, oil prices rose more than 1% in the early hours of Wednesday after dropping almost 6% on Tuesday. Powell stated that the Fed is waiting for the proper moment to lower interest rates in order to boost the economy, and lower oil prices may allow it to do so.
After stuttering at first, the tenuous ceasefire between Iran and Israel that Trump had declared the day before seemed to be holding.
Brent oil, the global benchmark, increased 1.1% to $66.95 a barrel, while the U.S. benchmark rose 1.2% to $65.16.
Powell stated that the Federal Reserve will continue to wait and observe how the economy develops before deciding whether to lower its key interest rate, which is directly at odds with President Donald Trump’s calls for immediate cuts. Lower oil prices may allow the Fed to lower interest rates to support the economy.
Powell stated in testimony before the House Financial Services Committee on Tuesday that, for the time being, we are in a good position to hold off on changing our policy stance until we have more information about the expected trajectory of the economy.
Early Wednesday in Asian trade saw the Hong Kong Hang Seng rise 0.9% to 24,386.59 and Tokyo’s Nikkei 225 gain 0.3% to 38,917.08.
At 3,437.10, the Shanghai Composite index increased by 0.5%.
Australia’s S&P/ASX 200 gained 0.1% to 8,562.90, while South Korea’s Kospi increased 0.2% to 3,110.19.
India’s Sensex was up 0.7%, while Taiwan’s Taiex was up 1.1%. The SET dropped 0.4% in Bangkok.
The globe can now proceed to confront more challenging decisions, such as tariffs and similar matters. Frances Lun, the CEO of GEO Securities in Hong Kong, stated, “I believe the market is on its way to rebound and could again reach new levels.”
Following significant gains for markets in Europe and Asia following President Donald Trump’s announcement late Monday that Israel and Iran had reached an agreement on a full and final truce, the S&P 500 increased 1.1% to 6,092.18, on Tuesday.After dropping around 20% during the spring, the primary indicator of Wall Street’s health is now within 0.8% of its February record.
The Nasdaq composite surged 1.4% to 19,912.53, while the Dow Jones Industrial Average surged 1.2% to 43,089.02.
Throughout the Israel-Iran conflict, there has been concern that it may deplete the world’s oil supply, raising gas prices and harming the world economy. Iran is a significant producer of crude oil and may attempt to block the Strait of Hormuz off its coast, which is used by ships to transport 20% of the world’s daily oil demands.
Oil prices have already fallen so dramatically over the past two days that they are now below their pre-conflict levels, which started over two weeks ago.
As long as the truce is maintained and a long-term peace agreement is reached, oil prices may drop even more, given that the world market is well supplied and that the OPEC+ alliance of producing nations is gradually raising production.
Anyone who does not want to see rising oil prices lead to tighter monetary policy and faster inflation will be happy to hear that stress in the energy markets is decreasing. Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, stated in a remark that the market’s mood has so improved.
Before deciding on its next course of action, the Fed has stated time and time again that it wants to wait and observe how much additional tariffs imposed by Trump will harm the economy and increase inflation. Although a data on consumer confidence in the United States came in lower than analysts had anticipated on Tuesday, and inflation has stayed just above the Federal Reserve’s 2% target, the economy appears to be holding up fairly well so far.
The U.S. dollar increased from 144.93 to 145.10 Japanese yen in exchange transactions. From $1.1610, the euro rose to $1.1617.
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Contributions were made by AP Business Writer Stan Choe in New York and video journalist Alice Feng in Hong Kong.
