Markets on edge as US Fed meets to tackle inflation
LONDON - Oil prices jumped, US bond yields rallied and equities retreated on Tuesday, as the US Federal Reserve looked set to raise interest rates with high inflation and AI concerns dominating market sentiment.
Markets are on edge as the US Federal Reserve convenes a crucial meeting to address inflation. With crude oil prices nearing $110 a barrel and diesel prices hitting a record high of just under $6.27 a gallon, the pressure is mounting on President Donald Trump ahead of mid-term congressional elections. Susannah Streeter, chief investment strategist at Wealth Club, points out the volatility in financial markets, citing elevated energy prices and worries about their impact on inflation and interest rates.
The US Federal Reserve is set to meet and is expected to raise rates by 25 basis points to combat persistently high consumer prices in the world's largest economy. Recent official data revealed that US annual inflation remains far above the Fed's target, further bolstering the dollar. The crisis in the Middle East, with the Houthis taking control of a vital shipping route, has contributed to crude oil prices surging above $100 a barrel.
The surge in energy costs has heightened the pressure on central banks to raise borrowing costs. The European Central Bank recently increased interest rates in the euro zone, while the Bank of England is expected to keep its benchmark rate steady on Thursday due to the UK's economic growth struggles. European and Asian stock markets experienced losses on Tuesday following Wall Street's initial decline.
Thailand's Stock Exchange closed down 12.41 points (0.7%) at 1,578.66, while turnover reached 75.8 billion baht. Technology stocks faced renewed weakness after executives in the AI sector called for a slowdown in artificial intelligence advancements. Anthropic's Dario Amodei, whose company developed the popular Claude AI system, urged for a slower pace, echoing sentiments from OpenAI's Sam Altman and SpaceXAI's Elon Musk. Microsoft has published a "humanist AI code of conduct" to address these concerns.
As of 10:25 GMT, Brent North Sea Crude was up 1.6% at $107.32 per barrel, while West Texas Intermediate increased by 2.2% to $103.54 per barrel. The London FTSE 100 dropped 0.3% to 10,663.02 points, while the Paris CAC 40 fell 0.2% to 8,089.28. Frankfurt's DAX declined 0.5% to 25,387.34, and Tokyo's Nikkei 225 remained flat at 63,484.10.
Hong Kong's Hang Seng Index lost 1.0% to 24,667.24, and Shanghai's Composite fell 0.5% to 3,864.28. The Dow Jones Industrial Average declined 0.3% to 52,421.20, and the dollar/yen pair reached 154.82 yen from 154.34 yen, while the euro/dollar rate decreased to $1.1538 from $1.1547. The pound/dollar rate fell to $1.3475 from $1.3500, and the euro/pound rate rose to 85.64 pence from 85.53 pence.
Written by urgent.news from Bangkok Post Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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