Daily Review 08 May 2025

US markets closed higher, with DJIA up 0.70%, S&P500 rising 0.43%, and Nasdaq gaining 0.27%. MSCI index added 0.25%, while Europe’s STOXX600 fell 0.54%. As expected, the Federal Reserve kept interest rates steady but warned of rising inflation and labor market risks. While noting the economy’s solid growth, it also flagged heightened concerns over inflation and unemployment, partly due to the impact of Trump’s tariff policies. Investors are closely watching US-China trade developments as Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer prepare to meet China’s top economic official this weekend, aiming to ease tensions after last month’s trade flare-up. Chipmaker stocks rallied after Bloomberg reported that the Trump administration plans to roll back AI chip restrictions imposed under the Biden administration. The dollar index rose 0.42% to 99.92, as the euro fell 0.62% to USD1.1297 and the dollar gained 1.03% against yen to 143.88. The yield on US 10yrs Treasury fell 4.9bps to 4.269%, while 2yrs edged down 0.8bps to 3.781%. Oil prices dropped over USD1.0 a barrel as doubts over a US-China trade breakthrough and eased Iran-US supply fears weighed on the market. Today, Asia-Pacific markets traded mixed, with Nikkei225 opening up 0.28%, Topix remaining flat, Kospi gaining 0.36%, ASX200 dipping 0.14%, and Hang Seng futures trading below the previous close. Yesterday, the JCI index closed 0.41% higher at 6,926.23.