World shares were mixed on Wednesday after the benchmark S&P 500 closed at another record high, buoyed by a report that the U.S. economy grew at an unexpectedly strong 4.3% annual rate in July to September.
Global Indices Respond to U.S. Growth Surprise
The futures for the S&P 500 and the Dow Jones Industrial Average were down less than 0.1% at the close of the session, indicating a cautious stance from investors. Britain’s FTSE 100 slipped 0.2% to 9,870.89, while the CAC 40 in Paris added 0.2% to 8,121.32. Stock exchanges in London, Paris, Hong Kong and Australia closed early or will close early on Christmas Eve, and Germany’s markets were closed for the day. U.S. markets will end early Wednesday for Christmas Eve and stay closed for Christmas.
Asian Markets Show Mixed Movements
In Asia, Tokyo’s Nikkei 225 fell 0.1% to 50,344.10 and South Korea’s Kospi slipped 0.2% to 4,108.62. Hong Kong’s Hang Seng gained 0.2% to 25,818.93, while the Shanghai Composite index edged 0.5% higher to 3,940.95. In Australia, the S&P/ASX 200 slipped nearly 0.4% to 8,762.70. Taiwan’s Taiex picked up 0.2% and the Sensex in India fell 0.1%.
Commodities Rally on Geopolitical Tension
Gold and silver extended their rally after hitting record highs this week, driven by heightened geopolitical tensions. The price of gold rose 0.3% early Wednesday to $4,525.20 per ounce, adding to gains of about 70% for the year. Silver rose 1.6%.
U.S. Economic Indicators and Fed Outlook
On Tuesday, big gains for tech stocks pushed the S&P 500 up 0.5%, even though most stocks in the index fell. The Dow industrials added 0.2% and the Nasdaq composite rose 0.6%. The U.S. government’s first estimate of growth for the third quarter showed inflation remained high, while a separate report said consumer confidence faded further in December. The U.S. economy expanded at a 3.8% annual pace in April-June.
The Federal Reserve’s favored inflation gauge – the personal consumption expenditures index, or PCE – climbed to a 2.8% annual pace in the last quarter, up from 2.1% in the second quarter. On Wednesday, the Labor Department will release its weekly data on applications for jobless benefits, which stands as a proxy for U.S. layoffs. Investors are betting the Fed will hold steady on interest rates at its January meeting. Recent reports show high inflation and shaky confidence among consumers worried about high prices. The labor market has been slowing and retail sales have weakened.
Currency and Energy Prices
In other dealings early Wednesday, the dollar continued to fall against the Japanese yen, after officials said they could intervene with excessive moves in the yen. The dollar was trading at 155.83 yen, down from 156.17 yen. The euro rose to $1.1797 from $1.1796. Oil prices edged higher as traders kept an eye on risks of supply disruptions in Venezuela and Russia. U.S. benchmark crude oil added 12 cents to $58.50 per barrel. Brent crude gained 8 cents to $61.95 per barrel.
Key Takeaways
- S&P 500 hits record high on 4.3% July-September growth data.
- Major global indices show mixed reactions; European and Asian markets close early for Christmas Eve.
- Gold and silver rally, with gold up 0.3% to $4,525.20 per ounce.
The day’s trading reflected a blend of optimism around strong U.S. growth and caution amid persistent inflation, a slowing labor market, and geopolitical concerns affecting commodities and currencies. With markets closing early for the holiday, investors await the upcoming Fed meeting and the Labor Department’s jobless claims data for further clues on the U.S. economic trajectory.
