Global Shares Trade Mixed Ahead of U.S. Federal Reserve Decision
European gains and modest Asia-Pacific moves come amid weak Chinese activity readings and growing expectations of a Fed rate cut
Global equity markets traded unevenly Monday as investors positioned for a likely decision by the U.S. Federal Reserve later this week on whether to reduce interest rates.
France's CAC 40 rose 1.2% to 7,915.30 and Germany's DAX gained 0.6% to 23,838.03, while Britain's FTSE 100 was little changed, down less than 0.1% at 9,282.51. U.S. futures signaled modest strength, with Dow futures up about 0.2% at 46,287.00 and S&P 500 futures rising nearly 0.1% to 6,650.50. In Asia, Hong Kong's Hang Seng added 0.2% to 26,446.56 as the Shanghai Composite edged down 0.3% to 3,860.50. Australia's S&P/ASX 200 slipped 0.1% to 8,853.00, while South Korea's Kospi climbed 0.4% to 3,407.31. Stock trading was closed in Japan for a national holiday.
China's latest activity readings added a note of caution for investors. Retail sales grew 3.4% in August from a year earlier, the slowest pace since the previous November and down from 5.7% in July and 6.8% in June. "China’s economy continued to slide in August, with all key activity readings falling short of market forecasts once more," Lynn Song of ING Economics said in a report. She added that the weakness strengthens the case for additional short-term stimulus. Stephen Innes, managing partner at SPI Asset Management, said U.S. tariff policies have damaged trade dynamics, removing a former driver of growth tied to exports.
Market participants have increasingly priced in a Federal Reserve rate cut at this week's meeting, a shift that has supported equities in recent sessions. However, strategists warn that markets could react sharply if the Fed does not follow through. Energy prices were modestly firmer: benchmark U.S. crude rose 31 cents to $63.00 a barrel and Brent crude added 27 cents to $67.26. In currency markets, the U.S. dollar was essentially flat against major peers, trading at 147.67 Japanese yen versus 147.65 yen late Friday, while the euro was near $1.1734.
Analysts said the combination of softer Chinese demand and policy expectations in the United States is driving a cautious tone across markets. Weaker-than-expected data from China has reinforced calls among some economists for Beijing to deploy additional stimulus to support growth, while the Fed's actions on interest rates will be closely scrutinized for signals about the outlook for U.S. growth and inflation. Associated Press correspondent Ken Moritsugu in Beijing contributed to this report.