London: Wall Street ended its three-day streak of record highs on Wednesday as Federal Reserve Chair Jerome Powell issued cautious remarks on future interest rate cuts. Powell, balancing inflation risks with a weakening labor market, offered little clarity on the timing of further easing, describing equities as âfairly highly valued.â The Nasdaq fell nearly 1%, weighed down by a 2.8% drop in Nvidia, while Amazon, Microsoft, and Apple also retreated. The S&P 500 declined 0.6%, marking its largest single-day drop in three weeks, and the Dow slipped 0.2%. Boeing shares, however, rose 2% after securing an $8 billion order from Uzbekistan Airways, mitigating broader declines.
Asian markets rebounded overnight, led by a 3.6% surge in Hong Kongâs STAR 50 Index. Alibabaâs unveiling of its largest AI model boosted tech investor sentiment, highlighting the regionâs renewed focus on artificial intelligence innovation. U.S. futures edged higher, signaling a tentative recovery following Wall Streetâs pullback.
European markets were softer overall, although defense stocks continued a robust rally. Rheinmetall, Europeâs largest ammunition maker, has seen nearly a 2,000% gain since the conflict in Ukraine began, underscoring the ongoing demand for aerospace and defense suppliers amid geopolitical tensions. President Donald Trumpâs assertion that Ukraine could reclaim all its territory from Russia further bolstered defense equities, even as broader European indices faced pressure from weaker financials.
Commodities also reflected global economic shifts. While U.S. crude inventories fell, easing oversupply concerns, oil markets remained sensitive to potential geopolitical disruptions. Meanwhile, AI-driven projects in the U.S., including new data centers from OpenAI, Oracle, and SoftBank, point to technology sectors remaining central to global growth narratives.
As markets navigate these intersecting pressures Fed policy, AI optimism, geopolitical uncertainty, and corporate earnings investors remain cautious. Analysts advise close attention to central bank signals, corporate developments, and international conflicts that continue to shape global financial dynamics.