Japan's Nikkei 225 hit record high, South Korea's Kospi rise marginally ahead of US Fed rate decision

Asian markets today: Japan’s Nikkei 225 climbed over 1 per cent to a new record high on Wednesday amid mixed trading across Asian markets, as investors awaited the US Federal Reserve’s interest rate decision — widely expected to deliver a second consecutive 25-basis-point cut.

The Topix index was little changed, while South Korea’s Kospi edged up 0.17 per cent and the Kosdaq slipped 0.25 per cent.

Australia’s S&P/ASX 200 declined 0.16 per cent, and Hong Kong markets remained closed for holidays.

US Fed meeting expectations

Investors are pricing in nearly a 100 per cent chance of another quarter-point rate cut following September’s reduction, which would lower the federal funds rate to a range of 3.75 per cent–4.00 per cent.

The federal funds rate, determined by the Federal Open Market Committee, is the rate banks charge one another for overnight lending. Although it doesn’t directly impact consumers, the Fed’s rate decisions often influence borrowing costs on mortgages, credit cards, and other loans.

US stock market today

All three major U.S. stock indexes closed at new record highs on Tuesday, boosted by Nvidia’s gains after the company announced plans to build artificial intelligence supercomputers for the U.S. Department of Energy. Investor sentiment was also lifted by optimism surrounding upcoming earnings reports from major tech firms.

The Dow Jones Industrial Average rose 161.78 points, or 0.34 per cent, to 47,706.37. The S&P 500 added 15.73 points, or 0.23 per cent, to 6,890.89, while the Nasdaq Composite advanced 190.04 points, or 0.8 per cent, to 23,827.49.

What's behind the rally?

Nvidia CEO Jensen Huang revealed that the company will construct seven supercomputers for the Energy Department and currently holds $500 billion worth of bookings for its AI chips.

Investors were also processing developments on the trade front. According to The Wall Street Journal, U.S. President Donald Trump and Chinese leader Xi Jinping are set to discuss a trade agreement that would lower U.S. tariffs on Chinese goods in exchange for China’s pledge to limit exports of fentanyl precursor chemicals.

During his visit to Tokyo on Tuesday, Trump praised Japan’s first female leader, Sanae Takaichi, as the two leaders signed an agreement aimed at strengthening the supply of critical minerals and rare earths, part of their joint effort to reduce China’s dominance in key electronic component markets.

Meanwhile, earnings reports from 180 S&P 500 companies show that third-quarter profits have risen 10.5 per cent year-on-year, exceeding earlier projections, according to data from LSEG.

(With inputs from agencies)

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