Equities Dip as Rate Cuts Loom and Yen Surges

Global equity indexes experienced a dip due to potential U.S. trade restrictions and anticipation of Federal Reserve rate cuts. The Japanese yen's sharp rise was linked to suspected government intervention. An interest rate reduction is highly probable by September, stoking economic growth expectations. Oil prices rose, while gold saw losses.

Global equity indexes mostly fell on Wednesday, driven lower by potential U.S. trade curbs on chip equipment and declining tech stocks. Concurrently, both Treasury yields and the dollar reached four-month lows as Federal Reserve officials hinted at upcoming interest rate cuts.

The Japanese yen saw a significant increase, suspected to be the result of Tokyo's intervention to strengthen its long-depressed currency. According to CME Group's FedWatch tool, there's a 98% probability of a U.S. interest rate reduction by September, a move typically aimed at stimulating economic growth.

Peter Cardillo, chief market economist at Spartan Capital Securities, noted a shift in Federal Reserve rhetoric signaling a rate cut by the late third quarter. The S&P 500 fell by 1.39%, and the Nasdaq Composite dropped 2.77%. Despite this, the Dow notched its third consecutive record close, bucking the trend.

(With inputs from agencies.)