At a news conference on December 18, 2024, U.S. Federal Reserve Chairman Jerome Powell indicated that inflation remains a concern, likely to stay above the central bank’s 2% target. The Fed signaled a cautious approach to interest rate cuts due to potential impacts from President-elect Donald Trump’s policies. Despite rising inflation worries and the highest 10-year Treasury yield since April, U.S. stocks experienced slight gains, with the S&P 500 up 0.16% and the Dow Jones Industrial Average increasing by 0.25%. However, the Nasdaq Composite dipped slightly.
In Asia, currencies weakened against the U.S. dollar, posing challenges for central banks in managing exports and import inflation. Meanwhile, China’s consumer price index showed minimal growth, raising deflation fears amid weak domestic demand. In the tech sector, Nvidia CEO Jensen Huang predicted a lengthy timeline for quantum computing advancement, which negatively affected related stocks, prompting disagreements from other industry leaders.
Overall, market reactions suggest that investors had anticipated the Fed’s cautious stance. Attention is now on the upcoming U.S. jobs report, which could influence market sentiment further.
