A. M. 
Global equity markets soared on wednesday as dovish signals from Federal Reserve Chairman Jerome Powell and strong corporate results overshadowed lingering trade tensions, with Asian stocks posting their biggest single-day gain in more than two months.
Fed signals boost market optimism
Powell’s comments at a meeting of the Asociación Nacional de Economía Empresarial proved to be the catalyst for renewed market confidence. The Federal Reserve chairman expressed increased concern about the weakness in the labor market, stating that “downside risks to employment appear to have increased” in what he described as a “less dynamic and somewhat weaker labor market”. His comments reinforced expectations that the central bank will cut interest rates by 25 basis points at its october 28-29 meeting, with markets now pricing in a 99.6% probability.
The Fed chairman also signaled that the central bank’s quantitative easing program could end soon, noting that liquidity conditions are “gradually tightening” and emphasizing the need to avoid a repeat of the 2019 funding market disruptions. These accommodative signals sent the dollar lower against major currencies while boosting Asian stocks.
Major U.S. banks also delivered solid results, with JPMorgan Chase reporting a 12% increase in profit to $14.4 billion, while Goldman Sachs, Wells Fargo, and Citigroup all beat analysts’ expectations. ASML added to the positive earnings momentum, beating order forecasts with €5.4 billion in third-quarter bookings driven by demand for AI-related chips.
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