Global markets turned cautious on Wednesday as investors await the US Federal Reserve's interest rate decision, while geopolitical developments in the Middle East added to uncertainty. The Fed is expected to keep its policy rate unchanged, according to market expectations.
A US official stated that four ballistic missiles launched by Iran at a US base in Jordan were intercepted. Meanwhile, US Central Command (CENTCOM) announced that US and Saudi Arabian forces conducted airstrikes on targets linked to Iran-backed groups in eastern Iraq. Iran's Islamic Revolutionary Guard Corps (IRGC) reported targeting three oil tankers attempting to pass through the Strait of Hormuz that allegedly ignored warnings. Analysts said the resumption of conflict shows parties are far from a solution.
There were also reports that the US banned new Chinese-made humanoid robots to protect AI development, adding to trade tensions.
Federal Reserve Decision in Focus
The US Federal Reserve (Fed) is expected to keep its policy rate unchanged at its decision today. Low June consumer and producer inflation data give the Fed time to assess energy sector disruptions and inflation over the summer. Fed Chair Kevin Warsh's press conference will be watched for forward guidance and information on Fed task forces and monetary policy stance. Money markets price in rates to be kept unchanged in July, but a rate hike possibility remains on the table.
If the policy rate is kept unchanged, hawkish comments about a possible rate hike in September or other months would be interpreted as maintaining a hawkish stance. If a tight monetary policy message is given for September, it is expected to support the dollar and bond yields. If no tight monetary policy message is given, risky assets could benefit positively.
The US 10-year Treasury yield traded flat at 4.61%. The US Dollar Index fell 0.2% to 101.3.
Equity Market Movements
US chipmaker Micron Technology shares fell 8.9%, Advanced Micro Devices (AMD) shares fell 8.2%, and Applied Materials shares fell 7.8%. US beverage company Coca-Cola shares rose 5% after revising its annual revenue and profit forecasts upward. US aircraft maker Boeing shares rose 4.8% despite a larger-than-expected second-quarter loss, due to better-than-expected free cash flow. US paint manufacturer Sherwin-Williams shares rose 8.3% after second-quarter financial results exceeded expectations.
The Dow Jones Industrial Average rose 1.03%, the S&P 500 rose 0.21%, and the Nasdaq Composite fell 0.22%. Index futures showed mixed signals: S&P 500 and Nasdaq futures inched up before the Fed's decision, while other reports indicated a negative start.
In Europe, Unilever shares rose 8%, Safran rose 2.9%, ASML fell 2.9%, and Mercedes-Benz rose 2.9%. The UK's FTSE 100 rose 0.83%, Germany's DAX 40 rose 0.41%, France's CAC 40 rose 0.63%, and Italy's FTSE MIB 30 fell 0.69%. European index futures started the day negatively.
In Asia, South Korean chipmaker SK Hynix shares fell 17.7% despite second-quarter revenue up 257% year-on-year to 79.3 trillion won and operating profit up 557% to 60.5 trillion won. Japanese technology companies SoftBank Group fell 8%, Tokyo Electron fell 11.2%, and Kioxia fell 10.3%. Japan's Nikkei 225 fell 2.9%, South Korea's Kospi fell 11.3%, China's Shanghai Composite fell 0.5%, and Hong Kong's Hang Seng rose 1.4%.
Turkey's BIST 100 index fell 0.63% to 13,687.86 points, while the BIST 30 August futures contract rose 0.4% in the evening session compared to the normal session close. USD/TRY closed at 47.3790, up 0.1%, and opened today at 47.3940. Analysts noted that today's domestic data calendar is calm and the Fed's interest rate decision will be followed; technically, support levels for Turkey's BIST 100 are at 13,600 and 13,500 points, resistance at 13,800 and 13,900 points.
Today's data includes US weekly mortgage applications at 14:00 and Fed Chair Kevin Warsh press conference at 21:30. Chip stocks wobbled amid the uncertainties.
Updates
The FOMC voted 9-3 on July 29 to hold benchmark interest rates steady, with Cleveland's Beth Hammack, Minneapolis' Neel Kashkari, and Dallas' Lorie Logan dissenting in favor of a 25 basis-point hike. While the committee maintained its stance, market observers suggest the decision acts as a 'hawkish hold' that keeps a potential rate increase on the table for September. Amid these developments, Brent crude oil futures surged over 7%, and reports indicate that Donald Trump has publicly criticized the committee while calling for significant rate cuts.
The FOMC voted 9-3 on July 29 to keep benchmark interest rates steady, with Cleveland's Hammack, Minneapolis's Kashkari, and Dallas's Logan dissenting in favor of a 25 basis-point hike. While officials described economic activity as expanding despite Middle East tensions, the Dow, S&P 500, and Nasdaq staged a recovery to close higher following the decision, contrasting with reports of an initial drop. Markets are now recalibrating towards potential tightening in September, as focus shifts to inflation persistence and the impact of oil prices on Fed strategy.
The FOMC voted 9-3 on July 29 to hold benchmark interest rates steady, with Cleveland's Beth Hammack, Minneapolis's Neel Kashkari, and Dallas's Lorie Logan dissenting in favor of a 25 basis-point hike. While the committee’s post-meeting statement noted economic expansion remains solid despite Middle East uncertainties, analysts suggest September is now in play for a tightening move as inflation persists above targets. Following the decision, major indices saw a recovery, with the Dow Jones, S&P 500, and Nasdaq closing higher, buoyed by Microsoft’s strong quarterly results despite Meta's shares falling 7.95% on profit concerns.
The FOMC voted 9-3 on July 29 to hold benchmark interest rates steady, with Cleveland's Beth Hammack, Minneapolis's Neel Kashkari, and Dallas's Lorie Logan dissenting in favor of a 25 basis-point hike. Markets responded positively to the decision, with the Dow, S&P 500, and Nasdaq all posting gains, while the committee's post-meeting statement acknowledged economic growth continues despite uncertainties stemming from the Middle East conflict. Amid ongoing inflationary pressures, analysts and policymakers have increasingly signaled that a tightening move may be back on the table for the September meeting.
The FOMC voted 9-3 on July 29 to hold interest rates steady, with Cleveland's Beth Hammack, Minneapolis's Neel Kashkari, and Dallas's Lorie Logan dissenting in favor of a 25 basis-point hike. While the Fed maintained its stance, market indices including the Dow, S&P 500, and Nasdaq staged a recovery following the decision, and Microsoft shares jumped 15.5% after strong earnings. Conversely, Meta shares dropped 7.95% on profit concerns, even as the U.S. economy grew 1.5% in the second quarter and 30-year Treasury yields reached their highest level since 2007.
The FOMC voted 9-3 on July 29 to hold benchmark interest rates steady, with Cleveland's Beth Hammack, Minneapolis' Neel Kashkari, and Dallas' Lorie Logan dissenting in favor of a 25 basis-point hike. While the post-meeting statement described economic activity as expanding, analysts suggest the hawkish hold keeps a potential September rate increase in play. Following the decision, major indices saw a recovery with the Dow rising 1.19%, the S&P 500 gaining 1.66%, and the Nasdaq climbing 2.78%, even as quarterly earnings drove significant volatility in specific tech stocks.
The FOMC voted 9-3 to hold benchmark short-term interest rates steady on July 29, with three presidents—Beth Hammack, Neel Kashkari, and Lorie Logan—voting for a 25 basis-point hike. Following the decision, the Dow Jones Industrial Average recovered to close at 52,208.06 points, up 1.19%, while the S&P 500 and Nasdaq rose 1.66% and 2.78%, respectively. Additionally, chip stocks saw significant gains, with Micron Technology rising 18.4% and AMD climbing 13% during the market recovery.
The FOMC voted 9-3 to hold interest rates steady on July 29, with three Fed presidents voting for a 25 basis-point hike. Following the decision, the Dow Jones Industrial Average, S&P 500, and Nasdaq all saw recoveries, while chip stocks such as Micron Technology and AMD rose significantly. However, there are conflicting reports regarding the Dow, with some sources claiming it closed down 1,153.18 points.
The FOMC voted 9-3 to hold benchmark interest rates steady on July 29, despite three Fed presidents—Beth Hammack, Neel Kashkari, and Lorie Logan—voting for a 25 basis-point hike. Following the decision, the Dow Jones Industrial Average recovered to close at 52,208.06 points (up 1.19%), while the S&P 500 and Nasdaq rose by 1.66% and 2.78%, respectively. In the semiconductor sector, the Philadelphia Semiconductor Index dropped 4.5% to a two-month low, even as Microsoft shares jumped 15.5% following strong quarterly earnings.
The FOMC voted 9-3 to hold benchmark short-term interest rates steady on July 29, with three Fed presidents—Beth Hammack, Neel Kashkari, and Lorie Logan—voting for a 25 basis-point hike instead. Following the decision, the Dow Jones Industrial Average recovered to close up 1.19% at 52,208.06 points, while the S&P 500 rose 1.66% and the Nasdaq Composite climbed 2.78%. Additionally, Microsoft shares surged 15.5% on strong quarterly earnings, contrasting with Meta, which fell 7.95% due to a decline in net profit and free cash flow.
