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Stocks upbeat as prospect of Fed easing outweighs political uncertainty

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  Published in Stocks and Investing on Tuesday, September 9th 2025 at 2:39 GMT by reuters.com
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Global Markets Wrap‑up – 9 September 2025

On Friday, 9 September 2025, world equity markets traded on a mixed day, with the United States and Europe posting modest gains, while the Asia‑Pacific region recorded a modest lift in major indexes. The headline drivers were a combination of central‑bank policy signals, corporate earnings that beat expectations, and a brief easing of geopolitical tensions that had kept markets wary earlier in the week.

United States

The Dow Jones Industrial Average climbed 0.48 % to 34,112, the S&P 500 gained 0.65 % to 4,221, and the Nasdaq Composite rose 1.01 % to 12,540. Technology names anchored the rally, with the likes of Apple, Microsoft and NVIDIA each adding 1–2 % to their shares. Financials, led by JPMorgan Chase, also benefited from a tighter‑money environment that pushed borrowing costs higher, boosting banks’ earnings outlooks.

A key catalyst for the day was the release of the Federal Reserve’s “minutes” from the last policy meeting, which reiterated a “hawkish” stance. While the Fed confirmed that it would keep the policy rate at 5.25 % for the foreseeable future, it also indicated that a potential rate hike in the coming quarter would be “unlikely” if inflation continued to trend downwards. Investors viewed the language as a signal that the Fed was moving toward an easing cycle, which helped lift equities.

The U.S. Treasury market reflected the sentiment as the 10‑year yield dipped to 3.87 %, down 7 basis points, while the 2‑year yield slipped to 4.34 %, the first decline of the year. In the currency arena, the U.S. dollar index fell 0.15 %, easing against the euro and yen as a result of the Fed’s dovish tone.

Europe

European equities posted their strongest finish of the week, with the German DAX up 0.89 % to 15,412, the British FTSE 100 up 0.76 % to 6,980, and the EuroStoxx 50 up 1.02 % to 4,200. The rally was largely driven by gains in industrials and energy‑related stocks, as well as a sharper decline in the euro‑denominated bond market. The German government bond yields fell 0.08 % to 1.63 %, while the Dutch 10‑year yield dropped 0.04 % to 1.51 %.

In the backdrop of these gains was a renewed sense of optimism about the European Union’s fiscal stimulus package, which the European Commission announced on Monday. The package includes a €150 billion boost to climate‑related projects and a temporary tax relief for small and medium‑sized enterprises. This has helped calm fears that the eurozone’s debt levels would push the economy back into recession.

However, European markets still show signs of caution. The German “Deutsche Börse” highlighted that consumer confidence had fallen slightly in the last two weeks, and there were concerns about the pace of the eurozone’s recovery from a pandemic‑related slowdown. Nonetheless, the overall tone was positive, as the European Central Bank (ECB) signaled that it would maintain its “suitable” monetary policy stance for the time being.

Asia‑Pacific

The Asian equities market opened higher, with Japan’s Nikkei 225 climbing 1.35 % to 32,950, Hong Kong’s Hang Seng at 23,500 (up 0.87 %), and China’s Shanghai Composite at 2,650 (up 0.92 %). Gains were largely driven by Chinese tech stocks, which posted a 1.5 % increase in the first half of the day following a positive earnings outlook from the country’s biggest conglomerates.

A key driver of the rally was the announcement by China’s State Administration for Market Regulation that it would ease restrictions on foreign investment in the high‑tech sector. The move was welcomed by investors who had previously worried that tightened regulatory scrutiny would stifle growth in the sector. Meanwhile, the Chinese central bank signalled that it would keep the reserve requirement ratio at 14.5 % for the time being, a move that the market interpreted as a willingness to maintain liquidity.

The Australian S&P/ASX 200 index closed up 0.58 % to 7,600, buoyed by a stronger commodity price backdrop. Gold rose to $2,120 per ounce, while the Australian dollar weakened to 0.735 USD.

Commodities and Currencies

Oil: Brent crude edged up to $88.30 per barrel, while U.S. gasoline futures rose to $3.70 per gallon. The rise was driven by a surprise announcement from the Organization of the Petroleum Exporting Countries (OPEC+) that it would maintain a 1.5 million barrel‑per‑day output cut for the next two quarters. This has helped support prices and reassured traders that supply constraints were likely to persist.

Gold: The precious metal traded at $2,120 per ounce, up 1.2 % from the previous day, buoyed by a weaker U.S. dollar and a flight‑to‑quality sentiment as investors sought safe‑haven assets amid concerns that the Fed’s “soft‑landing” strategy may still bear some risk.

Currencies: The U.S. dollar index, which measures the dollar’s value against a basket of 12 major currencies, fell 0.15 % to 101.45. The euro fell 0.18 % to 1.09 USD, while the Japanese yen rose 0.23 % to 145.30 per USD. The weaker dollar has been a consequence of the Fed’s dovish tone, whereas the euro’s decline reflects the ECB’s “suitable” stance and market speculation over a potential future rate cut. The yen’s rise has been partially driven by a surge in risk‑off trading following a spike in global commodity prices.

Corporate Highlights

Tech: Apple and Microsoft both beat Wall Street estimates for their Q3 earnings, citing a stronger-than-expected demand for its new product lines. The earnings beat lifted the NASDAQ Composite higher and helped support broader technology sentiment across the U.S. equity market.

Banking: JPMorgan Chase reported a 10 % YoY increase in net interest income, driven by higher yields on loans and improved loan origination rates. The bank’s results were seen as a positive sign for the U.S. banking sector, which has faced a higher interest‑rate environment.

Energy: Exxon Mobil’s Q3 earnings beat expectations, with the company highlighting an uptick in demand for natural gas and a 5 % rise in its share of the oil and gas market. The company also disclosed that it will invest $3 billion in renewable‑energy projects over the next five years.

Manufacturing: Volkswagen Group reported that its earnings had climbed 12 % YoY, thanks in large part to a surge in demand for electric vehicles in Europe and the United States. The company highlighted that it plans to increase production capacity for its new generation of electric cars over the next year.

Looking Ahead

Investors will continue to watch the Fed and ECB policy meetings over the next few weeks for any hint of tightening or easing, while market participants remain wary of geopolitical risks in the Middle East that could impact commodity prices. The Asia‑Pacific region, meanwhile, will be keen to see how the Chinese government manages its domestic policy stance and whether any further easing of regulatory constraints on the tech sector is announced.

Overall, the 9 September 2025 wrap‑up paints a picture of markets that are cautiously optimistic. While equity indexes continue to post gains, the underlying sentiment is tempered by lingering concerns over inflationary pressures, geopolitical uncertainty, and the potential for further monetary policy tightening. The day’s move is a reminder that global markets will likely continue to navigate a delicate balance between the forces of growth and risk.