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Thursday, September 18, 2025
What’s happening: US stocks closed mixed on Wednesday after the Federal Reserve announced its monetary policy decision.
What happened: As was widely expected, the Fed lowered its benchmark interest rates by 25 basis points (bps), with the chief citing weakness in the US jobs market.
The Dow Jones index jumped more than 250 points on Wednesday, while the S&P 500 and Nasdaq 100 closed lower.
Why it matters: The US central bank announced the first interest rate cut since December last year on Wednesday, bringing its main lending rate to 4% – 4.25%. Hours before the Fed policymakers began their meeting, the new Governor Stephen Miran was appointed, following President Donald Trump’s moves to oust Lisa.
While Trump has been pushing for rate cuts, the newly appointed Governor Stephen Miran voted against the 25bps cut announced on Wednesday.
The Fed signalled plans to steadily cut interest rates for the rest of the year, with policymakers expressing concern around the tightening labour market. The Fed indicated that there could be two more rate cuts of 25 bps each in 2025.
Fed Chairman Jerome Powell was cautious during his press conference, talking about rising downside risks in the job market versus inflation. He added that inflation risks must be managed, while stressing on not hurrying into monetary policy easing.
Most of the sectors on the S&P 500 closed higher on Wednesday, with financial and consumer staples stocks leading the gains. However, information technology and industrials recorded losses.
Financial stocks helped the Dow Jones index record gains on Wednesday. However, a decline in Nvidia’s stock weighed on the Nasdaq 100.
Shares of Workday surged more than 7% on Wednesday, after activist investor Elliott Management bought a stake in the company worth over $2 billion.
The Dow Jones index jumped 260.42 points, or 0.57%, to close at 46,018.32. The S&P 500 slipped 0.10% to 6,600.35, while the Nasdaq 100 fell 0.21% to settle at 24,223.69.
What to watch: Investors will now focus on upcoming reports on inflation and the labour market to get further insights into the Fed’s future monetary policy.
Data on initial jobless claims (1630 UAE Time), Philadelphia Fed manufacturing index (1630 UAE Time) and CB Leading Index (1800 UAE Time) will be released today. Initial jobless claims, which jumped by 27,000 to 263,000 in the first week of September, are expected to ease to 240,000 in the latest week.
The Philadelphia Fed Manufacturing Index, which dipped to -0.3 in August from July’s five-month high of 15.9, is projected to rise to 2.3 in September. Analysts expect the CB Leading Index to decline by 0.2% in August following a 0.1% downturn in July.
Context: The AUD/USD forex pair edged lower this morning as investors assessed the latest economic data.
Details: Data released this morning showed that employment in Australia fell by 5,400 to 14.62 million in August, compared to a 26,500 rise in the previous month. The figure also missed market estimates of a 22,000 gain. The latest decline in employment was the first since May, following a 40,900 plunge in full-time jobs compared to a 63,600 gain in the previous month.
Meanwhile, Australia’s unemployment rate came in unchanged from the previous month at 4.2% in August, in-line with market projections.
Strength in the US dollar also weighed on the AUD/USD pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained around 0.2% to 97.02 this morning.
The AUD/USD forex pair slipped to 0.6650 this morning, while the S&P/ASX 200 declined 0.59% to trade at 8,766.90.
What to watch: Data on S&P Global manufacturing PMI, S&P Global services PMI and S&P Global composite PMI from Australia, due to be released on Tuesday, will remain in focus.
The S&P Global Australia manufacturing PMI, which rose to 53 in August from 51.3 in the previous month, is expected to decline to 52.7 in September. Analysts expect the services PMI business activity index to fall to 51 in September, from 55.8 in August. The composite output index is projected to dip to 50.4 in September, from 55.5 in the previous month.
Other Markets: European indices closed mixed on Wednesday, with the FTSE 100 and DAX 40 up by 0.14% and 0.13%, respectively, and CAC 40 and STOXX Europe 600 Index down by 0.40% and 0.03%, respectively.
India’s Prime Minister Narendra Modi assured all help to end the ongoing war in Ukraine after Russian President Vladimir Putin called to greet him on his 75th birthday. The news sent the RUB/USD pair lower in forex trading this morning.
The Macau Monetary Authority slashed the base rate by 25 basis points to 4.50% at its recent meeting, exerting pressure on the MOP/USD forex pair.
The Hong Kong Monetary Authority lowered its base rate by 25bps to 4.5%, which sent the HKD/USD pair slightly lower in forex trading this morning.
Japan’s core machinery orders dipped 4.6% to ¥898 billion in July, following a 3% gain in the previous month. The latest reading coming in below market expectations of a 1.7% decline exerted pressure on the JPY/USD forex pair.
New Zealand’s economy shrank by 0.9% in the second quarter, compared to 0.8% growth in the previous quarter, which sent the NZD/USD pair lower in forex trading this morning.
Eurozone’s current account (1200 UAE Time) and construction output (1300 UAE Time), Spain’s 30-year Obligacion auction (1240 UAE Time), 10-year Obligacion auction (1240 UAE Time) and 3-year Bonos auction (1240 UAE Time), France’s 2028 OAT auction (1300 UAE Time), 2031 OAT auction (1300 UAE Time), 2033 OAT auction (1300 UAE Time), 2034 Index-Linked OAT auction (1400 UAE Time), 2038 Index-Linked OAT auction (1400 UAE Time) and 2039 OATi auction (1400 UAE Time), Italy’s current account (1300 UAE Time), Canada’s CFIB business barometer (1500 UAE Time), South Africa’s building permits (1500 UAE Time), Turkey’s MPC meeting summary (1500 UAE Time) and foreign exchange reserves (1530 UAE Time), Bank of England’s interest rate decision (1500 UAE Time), US continuing jobless claims (1630 UAE Time), EIA natural gas stocks change (1830 UAE Time), 4-week Bill auction (1930 UAE Time), 8-week Bill auction (1930 UAE Time), 15-year Mortgage Rate (2000 UAE Time), 30-year Mortgage Rate (2000 UAE Time) and 10-year TIPS auction (2100 UAE Time), South Africa’s interest rate decision (1700 UAE Time), as well as Argentina’s balance of trade (2300 UAE Time) and unemployment rate (2300 UAE Time).
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