July 29 (UPI) — The stock market opened with the Dow falling 400 points on Wednesday ahead of the Federal Open Market Committee’s latest interest rate decision.
The committee will announce its decision on Wednesday afternoon with Federal Reserve Chairman Kevin Warsh making his second address since being appointed. Economic indicators point to the Fed holding interest rates at a target range of 3.5% to 3.75%.
“My colleagues and I recognize that high inflation has been an undue burden on American households and businesses,” Warsh said during a Senate Banking Committee hearing earlier this month. “The members of our committee have no tolerance for persistently elevated inflation and we share a resolute commitment to restore price stability.”
The war in Iran has increased economic pressure, driven by rising fuel costs as the United States and Iran use the crucial Strait of Hormuz as a point of negotiation. The annual inflation rate rose to 4.2% in May on the back of rising gas prices.
The Federal Reserve has maintained a target goal of 2% annual inflation rate.
The average fuel price in the United States is $4.09 per gallon for regular grade gasoline on Wednesday, AAA reports.
The Federal Reserve will announce its interest rate decision at 2 p.m. EDT, followed by an address by Warsh at 2:30 p.m. EDT.
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Stock markets across Asia mostly advanced on Friday, taking their cue from a fresh record close for the Dow on Wall Street, as some of the AI-linked shares battered in this week’s sell-off found their feet again while others kept falling.
The volatility was calmer than the heavy selling seen a day earlier, when worries about stretched technology valuations sent semiconductor shares tumbling across the region.
At the time of writing, South Korea’s Kospi led the bounce, climbing over 4% to recoup part of the nearly 8% plunge it suffered on Thursday. Samsung Electronics, the country’s largest company and a major chipmaker, jumped 7%, while smaller memory rival SK Hynix rose 4.9%.
In Tokyo, the Nikkei 225 added 1%, helped by a 6.6% leap in memory maker Kioxia, although chip-equipment supplier Tokyo Electron slipped 2.5%.
Elsewhere, Hong Kong’s Hang Seng gained 1.7% and the Shanghai Composite rose 0.7%, while Australia’s S&P/ASX 200 advanced 1.3% and Taiwan’s Taiex bucked the trend, easing 0.6%.
As for European markets, both the Euro Stoxx 50 and the broader pan-European Stoxx 600 opened within a 0.3% range.
The UK’s FTSE 100, Germany’s DAX 30, France’s CAC 40 and Italy’s FTSE MI, all traded between 0.1% and 0.3% higher.
Spain’s IBEX 35taly’s FTSE MIB led the pack and rose about 0.4%.
US stocks were mixed on Thursday, but the Dow still managed a fresh peak, rising 1.1% to 52,900.
The broader S&P 500 ended virtually flat despite seven in ten of its members gaining, held back by another retreat in chip stocks, while the technology-heavy Nasdaq fell 0.8%.
Sentiment drew support from data showing US employers added 57,000 jobs last month, well below the 100,000 forecast and a slowdown on May.
A softer labour market could ease inflation pressure and, with oil back below its pre-war levels, may lessen the case for the Federal Reserve to raise interest rates repeatedly this year, an outcome investors would welcome.
Crypto-linked shares also firmed as Bitcoin rose about 2%, lifting Robinhood and Coinbase alongside it.
Still, the AI trade remained under strain.
Micron gave up an early gain to fall 5.5%, a day after a 10.6% slump, while Lam Research sank more than 10% and Nvidia, now worth close to $4.7 trillion, edged 1.4% lower.
On oil, Brent crude, the international benchmark, rose 1% to around $73 a barrel early Friday, while US crude added 0.5% to about $69, with prices still sitting below where they were before the Iran war began in late February.
Additional sources • AP
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