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Wall St closed lower on Thursday following the Fed’s interest rate hike of 25-basis points, and US GDP data coming in at 2.4% growth for Q2 which beat economists’ expectations. The strength in US economic growth is in-line with the Fed’s expectations for inflation in the world’s largest economy to remain sticky for a little while to come. The Dow Jones snapped its longest rally since 1987 closing down 0.67%, the S&P500 fell 0.64% and the tech-heavy Nasdaq dropped 0.55% on Thursday.
Social media giant Meta jumped 4.4% after reporting a jump in second quarter advertising revenue and topping expectations for quarterly results. Meanwhile, Southwest airlines posted a dip in quarterly profit which sent shares in the carrier down 8.47%.
Over in Europe, the European Central Bank hiked the region’s cash rate by 25-basis points overnight to 3.75%, with central bank officials noting that while inflation in the region is falling, the hike is to ensure inflation continues to fall. Stocks in the region closed higher on Thursday on the outlook for rates to pause as early as the September ECB meeting. The STOXX600 rose 1.4%, Germany’s DAX rose 1.7%, the French CAC added 2.05%, and, in the UK, the FTSE100 lifted 0.2%.
Locally yesterday, the ASX200 closed 0.73% higher buoyed by a 3.33% rise for the REIT sector as investor appetite for real estate stocks rose on optimism that the Fed has now finished its monetary tightening cycle. The energy and materials sectors were the only two sectors to close Thursday’s session in the red.
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