Fed rate hike expectations boost Asian stocks

Most Asian stock markets rose on December 5, as US economic data failed to change expectations that the Federal Reserve will cut interest rates next week.

An electronic board displays the KOSPI stock index at Hana Bank in Seoul, South Korea. Photo: THX/TTXVN

At the close of trading in China, Hong Kong's Hang Seng Index rose 0.6% to 26,085.08 points, while the Shanghai Composite Index rose 0.7% to 3,902.81 points. South Korea's Kospi Index rose 1.78% to 4,100.05 points. Meanwhile, Japan's Nikkei 225 Index fell 1.1% to 50,491.87 points.

In recent sessions, markets have struggled to maintain last week's strong gains, helped by comments from Fed officials that showed support for further easing of monetary policy.

However, investor optimism was bolstered by reports that reinforced the view that the job market is weakening, including data from human resources management company ADP showing that the US private sector cut more than 30,000 jobs in November 2025. Although data released on December 4 on unemployment benefits was better than expected, traders said the probability of the Fed cutting interest rates next week was around 90%.

Market attention now will be on the Fed’s preferred inflation measure, the personal consumption expenditures report, due later in the day on December 5. If the figure comes in lower than expected, it will increase the likelihood of more rate cuts in 2026. Income and spending data will also be released.

Analyst Michael Hewson at MCH Market Insights warned that, with markets already bracing for another Fed rate cut, any delay could cause a significant negative reaction.

Meanwhile, analyst Michael Krautzberger of AllianzGI said that while he could not confirm the Fed's decision, recent statements from policymakers, macroeconomic data and market prices all pointed to the possibility of a 25 basis point rate cut next week. AllianzGI maintained its forecast that the Fed would cut a total of 50 basis points to a target range of 3.25-3.5% by mid-2026.

In the domestic market, at the end of the session on December 5, the VN-Index increased by 4.08 points, or 0.23%, to 1,741.32 points. The HNX-Index decreased by 1.66 points, or 0.63%, to 260.65 points.

Source: https://baotintuc.vn/thi-truong-tien-te/ky-vong-fed-tang-lai-suat-thuc-day-chung-khoan-chau-a-20251205171017925.htm