Fed holds rates steady as markets weigh outlook

US equities closed mixed on Wednesday after the Federal Reserve held interest rates steady at 3.75%–4% as expected. At 20h32 SAST, the S&P edging up 0.23%, the Dow Jones Industrial Average added more than 150 points, or 0.30%. The Nasdaq ended broadly flat as investors weighed the absence of clear forward guidance and continued to price in a roughly 90% chance of another 25-basis-point hike in December 2026. Fed Chair Kevin Warsh adopted a confident tone on inflation, indicating that expectation remain well-anchored. Meanwhile, the 10-year US Treasury yield remained above 5% and the US Dollar Index was little changed at 102.3 points. 

Corporate earnings remained a key focus ahead of the closing bell. Microsoft fell 0.50% and Alphabet gained 1.60% due to results after the closing bell. Alphabet was supported by reports that OpenAI intends to purchase AI computing chips from Google. Apple slipped 0.80% despite unveiling a revamped MacBook Pro with a touchscreen, while Meta declined 1.20% and Tesla lost 1%. 

Gold slipped to around $4 030 per ounce on Wednesday, close to its lowest level in three months, as a firmer US dollar and expectations of prolonged higher interest rates weighed on demand for the metal. The dollar remained near a two-week high after the Fed opted to keep borrowing costs unchanged, reducing gold’s appeal because bullion offers no yield. 

Market attention also turned to the Middle East, where reports suggested the US and Israel could undertake major strikes against Iran if a last-minute agreement is not reached. The prospect of wider conflict has added to uncertainty over global energy supplies. Oil prices rose by more than 1% after an attack on a refinery in Saudi Arabia renewed fears of disruption to crude supplies. Higher energy costs could keep inflation elevated, strengthening the case for the Fed to maintain restrictive monetary policy for longer. 

European equity markets ended the session mixed, with investors balancing a heavy schedule of corporate results, firmer oil prices and the Fed’s latest policy decision. The Euro Stoxx 50 closed marginally higher at 6 167.81, while the pan-European Stoxx 600 finished broadly unchanged at 644.14. Germany’s DAX was the strongest performer among the major indices, rising 0.44% to 25 704.02, while the UK’s FTSE 100 added 0.07% to 10 694.50, and France’s CAC 40 closed flat at 7 892.96. Company updates continued to shape sentiment. Deutsche Bank gained roughly 4% after delivering a stronger-than-expected rise in third-quarter profit and Standard Chartered advanced after raising its full-year targets. Elsewhere, however, the earnings picture was less encouraging: Logitech, GSK and Banco Santander all came under pressure, underscoring the uneven nature of this reporting season. 

Asian markets rallied on Wednesday as renewed optimism around artificial intelligence (AI)and strong semiconductor earnings lifted technology shares across the region. Japan’s Nikkei 225 climbed 1.08% to 63 954.19, China’s Shanghai Composite advanced 0.81% to 3 677.99, and Hong Kong’s Hang Seng Index edged up 0.28% to 23 104.91. 

The rally was driven largely by South Korean chipmaker SK Hynix, whose shares surged nearly 11% after reporting a record third-quarter operating profit of $62.8 billion, up more than sixfold year on year, on robust demand for memory chips used in AI infrastructure. The strong results also lifted Samsung Electronics by more than 8% ahead of its own earnings release, while broader gains in robotics, semiconductor and AI-related stocks supported sentiment across Asian bourses. 

South Africa’s stock market ended Wednesday broadly unchanged, with a slight downward bias, as investors remained cautious ahead of the Fed’s interest-rate decision. The JSE All Share Index slipped 0.06% to close at 109 759.05, while the Top 40 Index eased 0.04% to 101 566.62. Financial shares led the gains, rising 0.31%, and resource stocks were largely steady, edging up 0.02%. 

Coronation Fund Managers was among the day’s biggest losers, falling 4.55% after a voluntary trading update indicated that full-year earnings could decline by 5% to 15%. Sentiment was also dampened by uncertainty over South Africa’s continued participation in the African Growth and Opportunity Act (AGOA), with investors weighing the potential impact of renewed US tariff risks on the country’s export competitiveness and trade relations.