Asian markets rallied for a second consecutive day Wednesday, fueled by growing optimism that the U.S. Federal Reserve might lower interest rates as inflation pressures showed signs of easing. Japan’s Nikkei 225 led gains, rising 1.5% to 43,359.03 by early afternoon—its second intraday record this week—after the S&P 500 and Nasdaq closed at fresh highs on Wall Street. Investor sentiment hinged on newly released U.S. data suggesting President Donald Trump’s tariff policies had a milder-than-expected impact on consumer prices, reigniting speculation about a September rate cut.
The Fed’s potential policy shift triggered sharp criticism from Trump, who lambasted Chair Jerome Powell on Truth Social, demanding an immediate reduction to 1% and threatening legal action over Federal Reserve building renovations. “Stocks interpreted the inflation figures as confirmation of a pending ‘insurance cut’ in an economy that remains fragile,” said Stephen Innes of SPI Asset Management. However, analysts cautioned against expectations of drastic easing. Katy Stoves of Mattioli Woods noted, “Moderate economic cooling doesn’t warrant slashing rates to the levels the president advocates.”
Global markets mirrored the cautious optimism. Hong Kong’s Hang Seng climbed 1.4%, while the Shanghai Composite edged up 0.5%. In Europe, London’s FTSE 100 closed 0.2% higher, and New York’s Dow Jones rose 1.1% overnight. Currency markets saw slight fluctuations, with the euro strengthening marginally against the dollar and yen.
Meanwhile, oil prices dipped 0.2% despite OPEC revising its 2026 demand forecast upward, signaling confidence in future economic growth. Traders also monitored geopolitical developments, including Friday’s planned Alaska summit between Trump and Russian President Vladimir Putin to discuss the ongoing Ukraine conflict.
Corporate highlights included AI startup Perplexity’s $34.5 billion bid for Google’s Chrome browser, which could emerge as a condition of antitrust litigation. Intel shares surged 5.5% after CEO Lip-Bu Tan met with Trump, who reversed earlier criticism of the executive.
Market watchers now await further U.S. economic indicators and central bank signals, with global equities balancing optimism over potential rate cuts against lingering trade and geopolitical risks. Key closing figures included Brent crude at $66.01 per barrel and the dollar trading at 148.04 yen, reflecting sustained investor appetite for risk amid evolving monetary policy expectations.
