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Wall Street rallied overnight after the Federal Reserve maintained the U.S. cash rate at 5.25%-5.5% for another term as was expected by economists amid inflation continuing to fall in the world’s largest economy. The Dow Jones rose 0.7%, the S&P500 added 1.05%, and the tech-heavy Nasdaq has the biggest rise of 1.64%. The Fed’s decision to maintain and not hike the US cash rate was received positively by markets however Fed Chair Jerome Powell did not rule out further rate hikes in future if inflation rebounds. Positively, economic data released in recent times all point toward economic stability while inflation also cools which supports the idea of a soft landing as opposed to a recession, with the latest ISM Manufacturing index showing manufacturing activity contracted more than expected in October.
Over in Europe, markets closed higher on Wednesday ahead of the Fed’s interest rate decision with the STOXX600 rising 0.7%, buoyed by retail stocks climbing 1.7%. Germany’s DAX added 0.76% on Wednesday, the French CAC lifted 0.68%, and in the UK, the FTSE100 rose 0.28%.
Shares in Aston Martin plunged 13% yesterday after the luxury car maker reported a bigger-than-expected quarterly loss and cut its volume target. The European rally also came off the back of fresh euro zone inflation data being released showing inflation in the region hit a 2-year low of 2.9% in October.
Locally yesterday, the ASX200 extended its green run into the midweek session, closing the day up 0.85% led by real estate stocks lifting 1.85%, while the health care and energy sectors added 1.45% and 1.13% respectively. The local rally was driven by strength in the US on Tuesday and the big miners rose on the back of the rising price of iron ore.
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