Market Commentary - Foreign Markets
18-Dec-2024 11:54
Markets Slide as Fed Rate Cut Looms
Stocks across multiple sectors experienced significant losses on Wednesday, with networking, semiconductor and financial indices falling sharply. The NYSE Arca Networking Index tumbled 2.2% while the Philadelphia Semiconductor Index dropped 1.6%. Financial stocks also struggled with broker/dealer and bank indices declining 1.5%. Telecom, housing and steel stocks further contributed to the market's negative sentiment. However, pharmaceutical stocks provided a bright spot, driven by Pfizer's impressive 4.7% surge after releasing promising 2025 revenue projections that met market expectations.
The Federal Reserve is expected to cut rates by a quarter point on Wednesday, with markets closely watching economic projections amid concerns about potential slower rate reductions in 2025, influenced by sticky inflation and stronger-than-expected November retail sales data.
Asia-Pacific stocks turned in a mixed performance. Japan's Nikkei 225 Index dipped by 0.2% and China's Shanghai Composite Index slid by 0.7%, while Australia's S&P/ASX 200 Index advanced by 0.8%. European stocks moved mostly lower. The U.K.'s FTSE 100 Index slumped by 0.8% and the German DAX Index fell by 0.3%, although the French CAC 40 Index bucked the downtrend and inched up by 0.1%.
In the bond market, treasuries saw modest strength after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.2 bps to 4.38%.
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