On Wednesday (October 9th) local time, the three major U.S. stock indices closed higher, with the Dow Jones Industrial Average and the S&P 500 both reaching new historical highs. The "Seven Sisters of Technology Stocks" saw mixed performances, with Apple and Amazon rising by more than 1%, while Google and Tesla fell by more than 1%. The spot price of London gold fell for the sixth consecutive day.

The FTSE China A50 Index futures broke through the 13,700 point mark during the night session. The Nasdaq Golden Dragon China Index narrowed its losses.

The minutes of the Federal Reserve's September monetary policy meeting revealed disagreements among officials about cutting interest rates by 50 basis points, with some decision-makers supporting a smaller cut of 25 basis points. The market will also focus on U.S. CPI inflation data and U.S. stock earnings reports this week.

Minutes of the Federal Reserve Meeting Reveal Disagreements Over September Rate Cut

In the early morning of October 10th Beijing time, the Federal Reserve released the minutes of its latest interest rate meeting, which detailed the reasons for the Federal Reserve officials' decision to cut interest rates by 50 basis points in September, as well as their latest assessment of the future path of monetary policy.

Advertisement

The minutes showed that "the vast majority" of the participants agreed to cut interest rates by 50 basis points, but "some participants" said that a 25 basis point cut would have been a better choice, and there were even officials who might have voted in favor of a 25 basis point cut.

Officials who supported a more significant rate cut believed that choosing a 50 basis point cut for the first time would align with the latest inflation and labor market data, thereby helping to maintain strong employment and economic growth while continuing to promote progress in reducing inflation.

Federal Reserve officials who believed that a 25 basis point cut was more reasonable emphasized that adopting an unexpected rate cut pattern was inconsistent with the Federal Reserve's intention to gradually lower policy interest rates; at the same time, the economic data itself only supported a rate cut, but did not point to an outsized rate cut.Some officials attending the meeting believe that, with economic growth remaining robust and the unemployment rate at a low level, a 25 basis point rate cut would be more in line with the gradual path towards normalizing monetary policy, and it would also give the Federal Reserve more time to assess economic progress. These officials added that a steady 25 basis point rate cut would also better demonstrate signs of predictability in the monetary policy path.

At the same time, there are differing views within the Federal Reserve on the degree of tightening, with some officials emphasizing the need to communicate externally that even with a rate cut, balance sheet reduction may continue for some time.

This implies that there is significant disagreement within the Federal Reserve regarding a 50 basis point rate cut in September.

Regarding the future path of rate cuts that the market is highly focused on, the minutes show that if inflation continues to decline towards the Federal Reserve's 2% policy target, and employment maintains its recent expansion trend, adopting a more neutral stance over time may be appropriate.

The minutes indicate that the Federal Reserve's monetary policy decisions have no preset course and depend on economic development, the impact on economic prospects, and the balance of risks to employment and inflation.

When discussing the prospects for monetary policy, Federal Reserve policymakers emphasized the need to make it clear to the outside world that a 50 basis point rate cut in September should not be seen as the Federal Reserve expecting a bleak economic outlook. They believe that decisions depend on the development and changes in the economic situation, the impact on economic prospects, and the balance of risks on both employment and inflation.

In terms of economic prospects, at the September interest rate meeting, Federal Reserve officials predicted that the U.S. economy would remain robust, with forecasts for real GDP growth roughly the same as the July meeting, but the unemployment rate was slightly higher than the July projection.

Regarding the inflation outlook, the minutes show that "almost all participating officials indicated that their confidence in inflation converging towards 2% has increased."

The Dow Jones Industrial Average and the S&P 500 Index reached historical highs.Following the release of the Federal Reserve's meeting minutes, U.S. stocks continued to maintain their upward trend. Data from Wind shows that by the close, all three major U.S. stock indices closed higher, with the Dow Jones Industrial Average up 1.03%, the S&P 500 up 0.71%, and the Nasdaq up 0.6%, with both the Dow and the S&P 500 reaching new historical highs.

The "Seven Sisters of Tech Stocks" saw mixed performances. Apple and Amazon rose by more than 1%, while Microsoft saw a slight increase; Google and Tesla fell by more than 1%, and Meta and Nvidia experienced minor declines. In terms of news, the U.S. Department of Justice is considering splitting Google's search engine. Kevin Thozet, a member of the investment committee at French asset management firm Carmignac, stated that although concerns about potential regulatory crackdowns on large tech companies have been around for some time, the real possibility of a split is putting pressure on market sentiment.

Most chip stocks rose. Broadcom, ASML, and Qualcomm increased by more than 2%, while GlobalFoundries, Intel, and TSMC saw minor increases, and AMD fell by more than 1%, with Nvidia and Micron Technology experiencing minor declines.

Bank stocks collectively rose. JPMorgan Chase, Goldman Sachs Group, Citigroup, and Morgan Stanley were up by more than 1%, with Bank of America and Wells Fargo seeing minor increases.

The three major European stock indices closed higher. Wind data indicates that by the close, the German DAX index was up 0.99%, the French CAC 40 index was up 0.52%, and the UK's FTSE 100 index was up 0.65%.

International oil prices fell for the second consecutive day, but the decline was less than the previous day. After falling by more than 4.6% on Tuesday, U.S. oil fell by 0.45% on Wednesday, and after falling by more than 4.6% on Tuesday, Brent oil fell by nearly 0.8% on Wednesday.

International gold prices continued to retreat. Spot gold fell by 0.55% for the sixth consecutive day of decline but remained above $2,600; COMEX December gold futures fell to $2,626.1 per ounce at the end of the day, marking six consecutive daily declines.

It is worth mentioning that the market will also be watching for the U.S. Consumer Price Index (CPI) for September, which will be released on Thursday, and the U.S. Producer Price Index (PPI), which will be released on Friday. In addition, large U.S. banks such as JPMorgan Chase and Wells Fargo will kick off the earnings season this week.FTSE China A50 Futures Rise Over 2% in Night Session

In terms of Chinese assets, the FTSE China A50 futures night session once broke through the 13,700 mark, closing up 2.87% at 13,649 points.

Most popular Chinese concept stocks fell. The NASDAQ Golden Dragon China Index opened down more than 3%, then continuously narrowed the loss, closing down 1.29%. NetEase fell more than 5%, Miniso fell more than 4%, iQIYI and Full Truck Alliance fell more than 3%, Weibo, Pinduoduo, Tencent Music fell more than 2%, Baidu, Douyu, Alibaba, JD.com, New Oriental, Huya, Futu Holdings fell more than 1%, Li Auto, Bilibili fell slightly; VIP Shop, NIO rose slightly, XPeng Motors rose more than 3%.