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Wall Street closed mixed on Wednesday with the Dow Jones closing higher for a 13th straight session, adding 0.23%, while the Nasdaq and S&P500 ended the session in the red, down 0.02% and 0.12% respectively. Investors digested the Federal Reserve’s announcement of a 25-basis point rate hike, taking the US cash rate to 5.25%-5.50%, the highest level in more than 22-years. Markets slipped in afternoon trade following the rate hike and comments out of fed chair Jerome Powell that another rate hike may be required in September pending the economic data readings over the coming months.
Google parent company, Alphabet, jumped 5.8% on Wednesday as cloud revenue growth boosted the company to report a better-than-expected quarter. Aircraft manufacturer Boeing also lifted 8.7% on Wednesday after also reporting a second-quarter beat on the back of increased commercial aircraft deliveries.
Over in Europe, markets closed lower in the region following the announcement of the Fed’s rate hike in the US in addition to the release of corporate earnings results in the region. The STOXX600 fell 0.6%, Germany’s DAX lost 0.5%, the French CAC fell 1.35%, and, in the UK, the FTSE100 shed 0.2%. Deutsche Bank shares rose 1.36% on Wednesday after the big bank reported a net profit of 763 million euros which beat expectations despite being a 27% decline year-on-year.
It’s a big week for central bank rate decisions with the Bank of Japan rate decision out on Friday and the European Central Bank decision announced on Thursday European time.
In Australia, the ASX rose 0.85% on Wednesday on the release of Australia’s CPI data for Q2 coming in at a quarterly rise of just 0.8% to an annual rate of 6%, which is well below the annual Q1 rate of 7% and below the 6.2% economists’ were expecting. The inflation reading boosted market sentiment as investors see the falling inflation as a sign of rate pauses on the horizon out of the RBA. While 6% in still above the RBA’s target range of 2-3%, the 1% decline in the annual inflation rate over the quarter is a strong sign the RBA’s rate hikes are working to cool inflation. Materials stocks did most of the heavy lifting on the market yesterday with the sector closing 1.83% higher, again boosted by the iron ore miners on speculation that China is about to announce further policy support to stimulate demand and growth in the region again post pandemic.
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