Asian Stocks Weaken, Ending Six-Day Rally Amid Fed Rate Uncertainty
Asian stock markets weakened at the open on Friday, ending a six-day rally, the longest winning streak since January. Pressure stemmed from uncertainty surrounding a potential interest rate cut by the Federal Reserve, which has made investors more risk-averse. Stocks in Japan and Australia fell, while South Korea gained slightly.
Meanwhile, the S&P 500 in the United States actually hit a new record, driven by gains in technology stocks despite the decline of most stocks in the index. The yield on the 2-year US Treasury bond remained high at 3.91%, reflecting expectations that the Fed will not cut interest rates anytime soon. Strong US employment data reinforced this view, with jobless claims falling for six consecutive weeks.
The continued solid labor market conditions justify the Fed's decision to maintain interest rates. This was conveyed by analysts from E*Trade Morgan Stanley, who stated that there are no signs of significant weakness in the labor market. Technology stocks remain the market's mainstay, particularly after strong earnings from Alphabet and a surge in Nvidia's stock price following positive sentiment toward artificial intelligence developments.
Meanwhile, President Trump declared the dismissal of Fed Chairman Jerome Powell "unnecessary" after visiting Fed headquarters. On the geopolitical front, investors are monitoring renewed tensions between Thailand and Cambodia after Thai fighter jets attacked military sites on the border. In Japan, inflation in Tokyo has cooled for the second month, although food prices remain high. (ayu)
Source: Newsmaker.id
