Gold Hits Record High as Global Interest Rates Expected to Fall - Stocks in Taiwan Slip After Trump's Comments
By Tom Westbrook
Gold reached a record high and bonds saw a rally on Wednesday in anticipation of a global decrease in interest rates. Meanwhile, stocks in Taiwan declined after U.S. presidential candidate Donald Trump made comments that indicated a lukewarm stance on the island's defense.
The S&P 500 hit record highs overnight, with futures remaining steady in Asia. The MSCI's broadest index of Asia-Pacific shares outside Japan was flat, while the Nikkei rose by 0.1%.
In Taiwan, chipmaker TSMC experienced a 2% drop, resulting in a loss of nearly $16 billion in market value, after Trump expressed uncertainty about U.S. support in an interview with Bloomberg Businessweek.
Chinese stocks remained subdued for the second consecutive day. The Taiwan dollar slightly decreased to a two-week low, while the yuan steadied at 7.2676 per dollar.
Market analysts suggest that a Trump victory in November could lead to a bullish USD due to potential tariffs and a higher budget deficit. The New Zealand shares reached their highest point since March 2022 after data showed a slowdown in inflation.
Treasuries maintained gains that pushed 10-year U.S. yields to four-month lows after Federal Reserve Chair Jerome Powell hinted at a possible rate cut in September. Gold prices surged to a record high of $2,478 per ounce, propelled by lower yields in the bond market.
Overall, the market outlook is influenced by expectations of global interest rate cuts, uncertainty surrounding Trump's policies, and the impact of inflation on various asset classes. Investors should monitor these factors closely to make informed decisions about their portfolios.