Global equities diverged on Thursday after the Fed’s third straight rate cut steadied sentiment, even as Chair Powell’s cautious tone and signs of division within the committee signalled a slower path of easing ahead. A steep drop in Oracle dragged global tech sharply lower, offsetting strength in cyclicals that pushed the DOW to a record high, while Europe notched modest gains and Asia weakened.
US stocks split sharply on Thursday as a rotation out of mega-cap tech and into cyclical names pushed the DOW to a fresh record high. The index jumped +1.3% as Visa (+5.0%) rallied on analyst upgrades, while the S&P 500 held steady and the NASDAQ fell -0.6% after Oracle plunged -12.8% on weak cloud revenue and sharply higher AI data-centre spending, dragging Nvidia (-2.8%), Broadcom (-2.5%) and AMD (-2.5%) lower. The Fed’s third straight 25bp rate cut kept focus on the policy outlook, with Chair Powell ruling out a January hike and signalling a slower pace of easing ahead as the committee remains divided over inflation risks. Initial jobless claims spiked to 236,000—the biggest jump since 2020—adding to labour-market uncertainty ahead of next week’s delayed November payrolls report, while a narrower US trade deficit hinted at firmer third-quarter growth. Disney (+1.5%) agreed a US$1 billion deal to license characters to OpenAI’s Sora platform, and political tensions resurfaced after President Trump indicated he would oppose any Warner Bros. Discovery deal that doesn’t include new ownership of CNN, complicating the takeover battle between Netflix and Paramount Skydance. In the rates market, the US two-year yield fell -5bp to 3.511, while the US 10-year yield lost -4bp to 4.123%.
European stocks moved slightly higher on Thursday as investors absorbed the Federal Reserve’s latest rate cut and Chair Powell’s remarks, with early caution giving way to modest gains across major indices. The STOXX 600 rose +0.5%, while the UK’s FTSE 100 added +0.5%, Germany’s DAX gained +0.7% and France’s CAC 40 advanced +0.8%. The Swiss National Bank held its key rate at 0% against a backdrop of flat November inflation. Attention now turns to next week’s ECB and Bank of England meetings.
Asian markets weakened on Thursday as investors absorbed the Federal Reserve’s rate cut alongside renewed pressure on global tech sentiment after Oracle’s earnings revived concerns over AI investment payoffs. China’s Shanghai Composite fell -0.7% as sentiment softened after the Fed outlook, Hong Kong’s Hang Seng finished flat, and South Korea’s Kospi slid -0.6%. Japan’s Nikkei 225 dropped -0.9%, dragged lower by a sharp -7.7% fall in SoftBank Group. Australia’s ASX 200 edged up +0.2% as a stronger-than-expected unemployment rate reinforced expectations of a tight RBA stance, though gains in miners and a +7.1% rise in James Hardie supported the broader market. New Zealand’s NZX 50 rose +0.2%, led by Hallenstein Glasson’s +3.6% advance.
WTI crude lost -2.0% to US$57.32/bbl, gold rose +1.1% to US$4,276.47/oz, iron ore inched up +0.3% to US$106.66/MT, and silver climbed +3.6% to US$64.02/oz.