Asian Pacific turns lower

US stock indices closed just shy of all-time highs on Wednesday after the Federal Reserve delivered its third consecutive 25-basis point rate cut, bringing the policy range to 3.50%–3.75% as expected. According to the updated dot plot, the Fed now expects one more rate cut in 2026 and another in 2027, outlining a slower and more cautious easing cycle ahead. According to the CME’s FedWatch Tool, investors reckon the Fed will make two 25-basis point cuts next year.

The decision helped stabilise bond markets and contributed to the late-session risk bid. Fed Chair Jerome Powell emphasised that the committee is “well positioned to wait and see how the economy evolves,” noting that the latest round of tariffs introduced by President Trump has been a meaningful driver of recent inflation pressures.

Equities responded positively. The Wall Street Index closed 1.1% higher while the NASDAQ added 0.3%. The S&P 500 rose 0.7% while the Russell 2000 jumped 1.3% to secure a fresh record close. Rate-sensitive names found renewed support from lower borrowing costs.

Source: TN Trader

But the upbeat session didn’t last long. After-hours trading quickly turned cautious as Oracle became the focal point. The company initially traded 5% lower after posting mixed quarterly results, but selling pressure accelerated, sending the stock down 11% to 25.74. Revenues came in below expectations, reinforcing concerns over how quickly large tech firms can monetise their AI investments. The disappointment spilt over into the broader tech complex, with nig tech and semiconductors lower across the board this morning.

European stock index futures were softer overnight as traders reacted to the weak earnings report from Oracle. But they all found support as the European exchanges opened for business. With no major earnings or data releases scheduled, investors focused on the tech sector and the Fed’s commentary.

Source: TN Trader

Fed Chair Powell said that it was now time to ‘wait and see’ following a series of rate cuts in the latter part of this year. The Swiss National Bank left rates unchanged at zero, as expected.

European sentiment was also still adjusting to US President Trump’s latest remarks criticising regional leadership, adding a mild political overhang as negotiations over Ukraine peace proposals continue behind the scenes.

Currency markets saw a measured reaction to the Fed’s latest 25bps cut, with broad USD softness setting the tone across major pairs. The Dollar Index slipped back towards 98.00 yesterday but has steadied in early trade this morning.

Source: TN Trader

The EUR/USD briefly broke over 1.1700, hitting its highest level since mid-October. The euro was supported by the softer dollar tone and rising market conviction that the ECB is comfortable keeping policy steady for now.

Meanwhile, USD/JPY stalled following its early pullback, with the yen showing mild strength as traders lean into expectations of an imminent Bank of Japan (BoJ) rate hike. That divergence — Fed easing vs. BoJ tightening — kept upside contained for the USD/JPY and reinforced a cautious tone as investors wait for more clarity from the BoJ next week.

GBP/USD eased slightly as the dollar attempted a modest rebound, though the pair remained supported by the broader post-Fed environment. With markets pricing in a high probability of a Bank of England rate cut next week, sterling’s path remains dependent on UK data and how quickly policymakers choose to follow the Fed’s lead.

Silver stayed firmly in the spotlight after punching through to fresh record highs overnight. Silver extended a breakout that has seen the metal rise more than 100% this year. Prices climbed as high as $62.89 before pulling back and consolidating around $62. Strong speculative flows, ongoing supply tightness, and expectations for further monetary easing all continue to underpin demand. Silver remains overbought according to its daily MACD.

Source: TN Trader

Gold, by contrast, held steady just above the $4,200 level, struggling to build on early gains as the dollar recovered modestly. Still, the metal remains supported by geopolitical tensions and the prospect of additional Fed cuts further down the line.

Source: TN Trader

Oil prices retreated after the brief geopolitical lift tied to US-Venezuela tensions faded, leaving crude vulnerable to broader macro pressures. Front-month WTI fell back below $58 to trade at its lowest levels in over a fortnight. The pullback reflects ongoing concerns about oversupply, with recent projections from the US Energy Information Administration pointing to record US production and expectations of a global surplus next year. 

Source: TN Trader

Signs of progress, however tentative, in Russia-Ukraine diplomacy also removed some of the risk premium that helped support crude earlier in the week. With product markets softening and crack spreads weakening, traders appear reluctant to chase prices higher until clearer catalysts emerge.

Natural gas extended its decline this morning, although it does appear to be steadying after Wednesday’s slump. January Gas is trading around $4.50 as the combination of mild weather expectations and comfortable supply conditions continued to weigh on sentiment. The reversal of last week’s multi-year highs has been sharp, reflecting how quickly the market has unwound from overbought levels.

Crypto markets saw a mild pullback after failing to hold onto the late-session rebound from the previous day. AI-sector jitters and uncertainty over the timing of tech-related investment returns added an extra layer of pressure to the broader digital asset space.

The VIX remained subdued with the December contract trading below 17.00. It has shown little reaction to the Fed or the broader market moves. Despite swings in tech stocks and ongoing geopolitical crosscurrents, volatility expectations remain anchored, suggesting investors are not positioning aggressively for near-term turbulence. The calm backdrop underscores the market’s belief that the Fed’s stance, even if only cautiously dovish, supports a relatively stable risk environment for now.

Markets enter Thursday in a more delicate mood after the Fed’s anticipated cut delivered fewer assurances about the pace of future easing. With a 9–3 vote split, including one call for a 50-basis point cut and two votes for no change, policymakers made clear that the path ahead will be data-dependent and potentially bumpy.