Asian shares showed a mixed performance on Thursday following the U.S. stock market’s approach to record highs after the Federal Reserve cut its main interest rate. While U.S. futures and oil prices dipped, reactions to earnings from technology leader Oracle raised concerns among investors, impacting tech stocks across the region.
The Federal Reserve’s decision to lower interest rates was largely anticipated. However, comments from Fed Chair Jerome Powell sparked optimism for potential further reductions in 2026. Despite this, Oracle’s disappointing earnings report took a toll on technology shares, particularly in Asia, as the company’s stock plummeted by 11.5% in aftermarket trading. This decline raised worries about Oracle’s aggressive investments in artificial intelligence, which some analysts believe may strain its cash flow. According to Ipek Ozkardeskaya of Swissquote, “The report was not dramatically bad, but it confirmed concerns around heavy AI spending, financed by debt, with an unknown timeline for revenue generation.”
Key Market Movements Across Asia
In Japan, the Nikkei 225 index fell 0.9% to 50,148.82, largely influenced by a 7.7% drop in SoftBank Group Corp., a significant player in AI investments. Local markets faced additional pressure as sentiment grew that the Bank of Japan might raise interest rates in its upcoming meeting next week.
Hong Kong’s Hang Seng index fluctuated throughout the day, eventually closing down 0.1% at 25,513.38. This decline followed the Hong Kong Monetary Authority’s decision to cut borrowing costs to 4.00%, the lowest level since October 2022. In China, the Shanghai Composite index decreased 0.7% to 3,873.32, with investors remaining cautious ahead of anticipated credit data for November. Reports indicated that new yuan loans fell sharply in October, indicating weaker consumer demand.
In Australia, the S&P/ASX 200 managed a slight increase of 0.2% to 8,592.00, following three days of decline, aided by gains in gold and mining stocks. The unemployment rate remained stable at 4.3%, slightly below the expected 4.4%.
The South Korean market also experienced a downturn, with the Kospi index retreating 0.6% to 4,110.62. Notably, chip manufacturer SK Hynix saw its stock fall 3.8% after the main stock exchange issued warnings regarding its rapid price increase this year. Taiwan’s Taiex closed down 1.3%, while India’s BSE Sensex rose 0.4%.
U.S. Market Performance and Outlook
On Wall Street, the S&P 500 gained 0.7% to close at 6,886.68, nearing its all-time high set in October. The Dow Jones Industrial Average climbed 1% to 48,057.75, while the Nasdaq Composite rose 0.3% to 23,654.16. Investors welcomed the prospect of lower interest rates, which typically enhance economic growth and boost investment values, despite potential inflation concerns.
Powell’s remarks suggested the Fed is navigating a challenging landscape, balancing a slowing job market with rising inflation pressures. He indicated that the central bank is now in a position where interest rates are not driving inflation or employment rates higher or lower, allowing for a period of reassessment before making further decisions.
Among notable stock performances, GE Vernova soared 15.6% after announcing an increase in its revenue forecast through 2028, alongside a doubled dividend and a larger stock buyback program. Other companies, such as Palantir Technologies and Cracker Barrel Old Country Store, also saw gains of 3.3% and 3.5%, respectively.
In commodity markets, U.S. benchmark crude oil fell by $0.31 to $58.15 per barrel, while Brent crude, the international standard, dropped by $0.34 to $61.87 per barrel. The U.S. dollar rose slightly against the Japanese yen, trading at 156.04, while the euro slipped to $1.1687.
As market dynamics continue to evolve, investors remain attentive to developments in both the U.S. and Asian markets, particularly in light of central bank policies and corporate earnings reports.
