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Japan’s Nikkei reels after Shigeru Ishiba’s win; China stocks are rising
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Japan’s Nikkei reels after Shigeru Ishiba’s win; China stocks are rising

  • US indices end choppy session higher
  • The Fed’s Powell takes a less dovish tone
  • Wall Street ends quarter, month with profits
  • Oil benchmarks are falling more sharply in a quarter than they have seen in a year
  • China’s stocks are rising again on the economic boost
NEW YORK/LONDON, Sept 30 (Reuters) – MSCI’s global stock index fell on Monday and the dollar rose as U.S. Federal Reserve Chairman Jerome Powell dampened hopes of another big interest rate cut, while oil futures Escalating conflict in the Middle East ended flat after a choppy meeting due to interest rate cut concerns.

However, global benchmark Brent crude posted its biggest monthly loss since November 2022 and its biggest quarterly decline in a year, plunging 17% in the third quarter as easing concerns about global demand overshadowed fears that the conflict would restrict supply could.

Stock trading was choppy after Powell suggested the central bank was in no hurry to cut interest rates. While some investors had been betting on more easing, Powell indicated that the Fed would make two 25 basis point interest rate cuts this year if the economy performs as expected.

“That sounded less expansionary than the market had priced in. There were some expectations for a 50 basis point cut by year-end. That comment probably took the matter off the table,” said Robert Phipps, principal at Per Stirling Capital Management in Austin, Texas.

Wall Street indexes rallied last week thanks to favorable U.S. core inflation numbers on Friday, which fueled bets for another half-percentage point interest rate hike from the Fed.
But on Monday, traders saw a 36.7% chance of a 50 basis point rate cut in November, compared with 53.3% on Friday, according to the latest reading from CME Group’s FedWatch toolopens new tab.

While stocks fell during Powell’s speech, they regained lost ground as the S&P 500 and Dow hit record highs on the final day of the quarter as many traders made last-minute adjustments to their portfolios.

“The price increases at the end of the day were probably due in part to losing perspective at the end of the quarter,” said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

The Dow Jones Industrial Average (.DJI)opens new tab The S&P 500 (.SPX) rose 17.15 points, or 0.04%, to 42,330.15.opens new tab rose 24.31 points, or 0.42%, to 5,762.48 and the Nasdaq Composite (.IXIC)opens new tab rose 69.58 points or 0.38% to 18,189.17.

For the month, the S&P 500 gained 2.01% and for the quarter it rose 5.53%.

MSCI’s stock index worldwide (.MIWD00000PUS)opens new tab fell 1.82 points or 0.21% intraday to 851.02. For the month, the global index recorded an increase of around 2% and for the quarter it recorded an increase of around 6%.
Along with the Fed comment, Per Stirling Capital’s Phipps said investors were watching the fighting in the Middle East and the devastation from Hurricane Helene, as well as an impending strike by U.S. longshoremen and news from China.

Item 1 of 4 Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., September 9, 2024. REUTERS/Brendan McDermid

On the trading day in Beijing, stocks had risen sharply following China’s latest round of economic stimulus.

The Chinese government’s stimulus measures announced last week continued to boost equity markets, with blue-chip CSI300 (.CSI300)opens new tab The stock closed up 8.5%, its biggest one-day gain since 2008, on top of its 25% rise in the last five trading sessions.

The dollar rose after Powell’s more hawkish tone led traders to cut their bets on a sharp rate cut in November.

“He’s taken his restrictive pills,” said Steve Englander, head of global G10 FX research and North America macro strategy at Standard Chartered Bank’s New York office, suggesting that the market is “starting to get worried that they be serious about 25 (basis points). cuts).

The dollar index, which measures the greenback against a basket of currencies including the yen and euro, rose 0.32% to 100.76.

The euro lost 0.27% to $1.1133, while the dollar gained 1% against the Japanese yen to 143.61.

In Treasuries, the benchmark 10-year U.S. bond yield rose 3.6 basis points to 3.785%, from 3.749% late Friday.

The two-year Treasury yield, which typically moves in line with interest rate expectations, rose 7.4 basis points to 3.637%, from 3.563% late Friday.

And a closely watched portion of the U.S. Treasury yield curve, which measures the spread between two- and 10-year Treasury yields and is considered an indicator of economic expectations, was at a positive 14.6 basis points.

In energy markets, U.S. crude oil prices settled down 1 cent at $68.17 a barrel, but slumped 7% in September, the largest monthly decline since October 2023, and slumped 16%, the largest quarterly decline since the third quarter of 2023.

Brent fell 21 cents to $71.77 a barrel. It posted a fall of around 9% in September, its biggest decline since November 2022 and its third consecutive monthly loss, along with a quarterly decline of nearly 17%, also its biggest in a year.

Gold fell, taking a breather after a historic rally driven by U.S. monetary easing and heightened tensions in the Middle East, putting gold prices on track for their biggest quarterly gain since early 2020.

Spot gold fell 1% to $2,631.39 an ounce. U.S. gold futures fell 0.54% to $2,629.90 an ounce.

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Reporting by Sinéad Carew, Karen Brettell, Nell Mackenzie, Dhara Ranasinghe and Wayne Cole; Edited by Susan Fenton, Toby Chopra, Keith Weir and Marguerita Choy

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