“We believe the Fed is trying to thread the needle, balancing market jitters about slowing global growth with robust consumer spending and a strong job market in the U.S.,” Nick Maroutsos, co-head of global bonds at Janus Henderson, told Reuters.
“In other words, by cutting just 25 bps, the Fed is trying to bolster market confidence while also keeping some dry powder in reserve in case of an economic shock.”
Oil prices also dropped following comments from the Fed.
Brent crude, LCOc1 the international benchmark, fell $1.06, or 1.6%, to $63.99 a barrel by 0037 GMT, while U.S. crude was down 93 cents, or 1.6%, at $57.65 a barrel, having fallen more than $1 earlier.
“Although the remarkably bullish U.S. inventory reports (are) providing a very encouraging backdrop for oil markets, oil prices sagged, as whatever forward-looking monetary policy support from the Fed has pretty much evaporated,” Stephen Innes, managing partner, VM Markets Pte said in a note, according to a Reuters report.
U.S. crude oil stockpiles fell for the seventh straight week, declining to their lowest levels since November even as production rebounded and net imports increased, the Energy Information Administration said on Wednesday.
Middle East markets
Saudi Arabia’s index edged 0.1 percent lower with Saudi Basic Industries Co dropping 1.1%. Samba Financial Group fell 1.2% as the lender was trading ex-dividend.
Dubai's index was up 0.2%. Emaar Properties rose 1.7% to its highest since June 14 last year.
Abu Dhabi’s index fell 0.3% with Emirates Telecommunications Group dropping 1.6%.
Qatar's index was 0.8% lower, with Qatar Insurance the biggest drag, falling 3.6%.
Egypt’s EGX30 gained 0.2%, while Bahrain, Oman and Kuwait’s premier market index were up 0.1%.
The dollar rose early on Thursday.
The dollar index .DXY, which measures the greenback against a basket of six major currencies, was last up 0.3% at 98.817
Gold prices fell on Thursday.
Spot gold was down 0.2% at $1,410.42 per ounce as of 0259 GMT.
U.S. gold futures slipped 1.2% to $1,421 an ounce.
(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)
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