Asian shares exhibited a mixed performance on Thursday, following a significant day on Wall Street. The fluctuations came in the wake of the U.S. Federal Reserve’s recent interest rate cut, which brought the main rate down and reignited discussions about the future of monetary policy. While U.S. futures and oil prices declined, the impact of Oracle’s disappointing earnings report weighed heavily on technology shares across the region.
In the U.S., the Federal Reserve’s decision to lower interest rates was widely anticipated. Fed Chair Jerome Powell hinted at the possibility of further cuts in 2026, which bolstered market optimism. However, the mood shifted as Oracle, a major player in the artificial intelligence sector, reported earnings that fell short of expectations, leading to an 11.5% drop in its aftermarket trading. Analysts expressed concern over the company’s substantial investments in AI, which they believe could strain its cash flow.
Market Reactions Across Asia
The Nikkei 225 index in Tokyo declined by 0.9%, closing at 50,148.82. The drop was exacerbated by a 7.7% fall in shares of SoftBank Group Corp, a significant investor in AI technologies. Investor sentiment in Japan is further influenced by speculation that the Bank of Japan may raise interest rates in its upcoming meeting.
In Hong Kong, the Hang Seng index reversed earlier gains, slipping 0.1% to 25,513.38, after the Hong Kong Monetary Authority followed the Fed’s lead and lowered borrowing costs to 4.00%, marking the lowest rate since October 2022. The Shanghai Composite index also fell, down 0.7% to 3,873.32, as investors remained cautious ahead of upcoming credit data from China, which has shown signs of weaker consumer demand.
Australia’s share market showed some resilience, with the S&P/ASX 200 gaining nearly 0.2% to 8,592.00, aided by a boost in gold and mining stocks. The country’s unemployment rate remained steady at 4.3% for November, slightly below the anticipated 4.4%.
South Korea’s Kospi index declined by 0.6% to 4,110.62, with chipmaker SK Hynix experiencing a 3.8% drop following warnings from the stock exchange regarding its rapid rise this year. Meanwhile, Taiwan’s Taiex index closed 1.3% lower, contrasting with India’s BSE Sensex, which rose by 0.4%.
Impact of U.S. Economic Data
While the S&P 500 climbed 0.7% to 6,886.68, nearly reaching its all-time high set in October, the Dow Jones Industrial Average increased by 1% to 48,057.75. The Nasdaq composite rose 0.3% to 23,654.16. Lower interest rates typically fuel economic growth and increase investment values, even though they can exacerbate inflation issues.
Although the recent interest rate cut did not produce significant market movements on its own, Powell’s remarks provided a sense of reassurance to some investors. He acknowledged the challenges the Fed faces, noting the conflicting pressures of a slowing job market and rising inflation. Powell emphasized that interest rates are now positioned in a way that does not significantly influence either inflation or employment, allowing the Fed to evaluate its next steps based on incoming data.
On Wall Street, notable movements included GE Vernova, whose shares soared by 15.6% after the company raised its revenue forecast for 2028 and doubled its dividend. Other companies like Palantir Technologies and Cracker Barrel Old Country Store saw rises of 3.3% and 3.5%, respectively.
In commodity markets, U.S. benchmark crude oil prices fell by 31 cents to $58.15 per barrel, while Brent crude dropped 34 cents to $61.87 per barrel. The U.S. dollar slightly appreciated against the Japanese yen, rising to 156.04 yen from 156.02 yen, while the euro declined to $1.1687 from $1.1696.
As markets adjust to the evolving economic landscape, investors will be closely monitoring both local and international developments for signs of direction in the coming weeks.
