Shares in Asia showed a mixed performance on Tuesday as global markets awaited the Federal Reserve's highly anticipated meeting. The Nikkei index in Tokyo declined by 1% to 36,203.22, while the Hang Seng in Hong Kong saw a 1.3% increase to 17,654.79. Markets in mainland China and South Korea remained closed for the day. Australia's S&P/ASX 200 rose by 0.2% to 8,140.90.
Investors are eagerly anticipating the Fed's decision on interest rates, expected to be the first rate cut in over four years. The main focus is on the extent of economic relief the Fed will provide. Market analysts caution that high policy expectations could lead to increased volatility and potential market re-pricing.
In the U.S., retail sales and industrial output data are set to be released later in the day. On Monday, the Dow surpassed its previous all-time high, closing at 41,622.08 with a 0.6% gain. The S&P 500 inched up by 0.1%, nearing its record set in July, while the Nasdaq composite slipped by 0.5%.
Oracle's strong performance, with a 5.1% gain, contributed to market growth, following a positive profit report. Alcoa also saw a 6.1% increase after announcing a stake sale in a Saudi Arabian joint venture. However, declines in influential Big Tech stocks like Apple and Nvidia tempered overall market gains.
Traders are speculating on a potentially larger rate cut by the Fed, with expectations leaning towards a half-point reduction. The impact of rate cuts on the economy and inflation remains a key concern. Inflation has moderated since its peak, allowing the Fed to focus on supporting the job market and economy, though critics warn of potential recession risks.
In currency markets, the dollar weakened against the Japanese yen, while the euro also saw a slight decline. U.S. benchmark crude oil prices rose, with WTI reaching $70.64 a barrel and Brent crude at $73.12 a barrel.
