Global markets mixed ahead of Fed rate hike decision

Global equity markets traded on mixed trajectories on Wednesday as investors positioned for the Federal Reserve's first interest rate hike in three years. The central bank is widely expected to announce a 25-basis-point increase following its two-day policy meeting. The US 10-Year Treasury yield climbed to 5.04% on Tuesday — its highest level since July 2007 — before stabilizing at 5%, while Treasury Secretary Scott Bessent noted the strong performance of American bond markets.

Washington policy moves rattle sectors

The US Senate failed to secure the necessary majority to advance the Clarity Act, blocking legislation that would have established a comprehensive regulatory framework for the cryptocurrency sector. Bitcoin edged down 0.1% to $75,780, while shares of crypto exchange Coinbase plunged 10%. The New York Fed's manufacturing index fell to 7.6 in September, below analyst estimates, and the average diesel price hit a record $6.27 per gallon, according to the American Automobile Association.

Commodities retreat while tech rallies

November-delivery Brent crude fell 0.6% to $108.1 per barrel despite geopolitical concerns, as rising US inventories eased supply worries. Gold slipped 0.6% to $4,321 per ounce, while the dollar index declined 0.1% to 99.6. Tech giant Meta gained nearly 1% after announcing tests of next-generation artificial intelligence chips designed to reduce costs and energy consumption.

Regional markets show split trends

The Dow Jones Industrial Average fell 0.63%, the S&P 500 dropped 0.45% and the Nasdaq declined 0.78% on Tuesday, though American indexes opened higher on Wednesday. European markets traded lower, with Germany's DAX 40 down 0.15% and Deutsche Bank shares falling 2.4%, as the ZEW Economic Sentiment Index reached 34.7, below estimates of 40. In Asia, Japan's Nikkei 225 rose 0.3% as exports surged 19.3% and imports jumped 28% in August, widening the trade deficit to 1.1 trillion yen, while South Korea's Kospi added 0.3% and China's Shanghai Composite climbed 0.6%.