Global Markets Roundup | Asian markets rally after U.S. Fed's monetary policy decision

Asian stock markets surged following the Federal Reserve's recent decision, mirroring the upward trajectory of U.S. equities and bonds. The Federal Reserve's indication that it might conclude its policy tightening cycle was met with optimism by investors.

Japanese, Hong Kong, and South Korean stocks all opened with gains, while mainland Chinese stocks started the day with a relatively stable performance.

On Wall Street, the S&P 500 witnessed a robust rally, climbing by over 1%, positioning the leading U.S. benchmark for its most impressive weekly performance since March. Notably, the tech-heavy Nasdaq 100 outperformed other U.S. indices.

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The decline in Treasury yields had a dampening effect on the U.S. dollar, causing it to weaken against major currencies and providing support for the Japanese yen, which continued to strengthen during early trading, extending its gains from the previous day.

Federal Reserve Chair Jerome Powell, in the central bank's decision, left the possibility of future interest rate hikes open. However, he also highlighted the considerable tightening of financial conditions in recent months, partly due to higher long-term bond yields and other contributing factors.

In the energy market, U.S. crude oil prices surged by over 1% at the market open, partly due to supply concerns arising from the ongoing conflict in Israel and Gaza. The Federal Reserve's decision to maintain its current stance also contributed to the oil price rally since any substantial increase in interest rates could potentially slow down the global economy, affecting oil demand.

The Federal Reserve's unchanged stance had a positive impact on non-yielding assets like gold. This is because higher interest rates would diminish the opportunity cost of holding precious metals.

The cryptocurrency markets also responded positively to the Federal Reserve's decision. Following Jerome Powell's public address, Bitcoin witnessed a notable increase of over 3%. Major alternative cryptocurrencies, including Ethereum and Ripple, followed suit with gains that mirrored Bitcoin's performance.

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