After a rough start to the week and a dismal finish in May on Wall Street, global stock indexes headed broadly during Tuesday’s New York session, and Asian indexes followed in kind on Wednesday. All Wall Street indexes soared more than two percent yesterday. The NASDAQ led the charge, gaining 2.65 percent. The S&P 500 closed up 2.14 percent and the Dow Jones Industrial Average ended 2.06 percent higher. Tuesday marked the biggest one-day jump for Wall Street indexes in five months.
In Asia, the Nikkei 225 jumped 1.83 percent as of 1:23 p.m. HK/SIN. The Shanghai Composite was up 0.80 percent and the Shenzhen Composite was up 0.79 percent, as was Hong Kong’s Hang Seng Index. South Korea’s Kospi saw the most modest gains with a 0.18 percent rise.
The bounce on Wall Street was prompted by comments from the Federal Reserve that hinted to the likelihood of an interest rate cut. On Tuesday, Federal Reserve Chair Jerome Powell commented that the Fed would respond “as appropriate” to the risks posed by the brewing trade war. The term was a deviation from Powell’s typical stance, which is that the Fed will practice “patience.” The change of language signaled to analysts that monetary easing may be forthcoming. Powell’s comments came only one day after St. Louis Federal Reserve President James Bullard commented that a rate hike might be necessary “soon.”
Dollar Remains Under Pressure
The U.S. dollar index hit a seven-week low of 96.995 .DXY on Wednesday before rebounding slightly to trade at 97.03 .DXY in the early afternoon in Asia. The dollar index is now more than 1.3 percent lower than the two-year high of 98.371 .DXY hit on May 23. The greenback was trading at 108.08 against the yen. The British pound was up 0.13 percent against the dollar, fetching $1.2713, while the euro gained 0.10 percent against the dollar to trade at $1.1265.