Global shares mostly rise after Wall Street sets new records

The Fed has been cautious with rate cuts because it feared a possible jump in inflation due to President Donald Trump’s tariffs. Lower interest rates can give inflation — which is already above the Fed’s 2 per cent target — more fuel and send it even higher

Tokyo: Global shares traded mostly higher on Tuesday after Wall Street set new records and investor anticipation grew that the US Federal Reserve will announce the first cut of the year to its main interest rate.

S&P 500 futures rose 0.2 per cent before the bell on Tuesday while Big Tech stocks pulled Nasdaq futures 0.3 per cent higher.

Futures for the Dow Jones industrials were unchanged. Oracle shares jumped 5 per cent on speculation that it would play a major part in the US-China deal to keep TikTok operating in the US after the Trump administration announced the framework of a trade deal on Monday.

US Treasury Secretary Scott Bessent said after the latest round of trade talks between the world’s two largest economies concluded in Madrid that US President Donald Trump and Chinese Premier Xi Jinping would speak on Friday to possibly finalise the deal.

He did not disclose the terms of the agreement. The New York Times Co. fell 1 per cent overnight after Trump filed a $15 billion defamation lawsuit against the newspaper and four of its journalists on Monday.

The lawsuit points to several articles and a book written by Times journalists and published in the lead-up to the 2024 election as “part of a decades-long pattern by the New York Times of intentional and malicious defamation against President Trump.”

Shares of the family restaurant and arcade chain Dave & Buster’s tumbled close to 16 per cent after the company reported far lower second-quarter profits than Wall Street expected as comparable store sales declined 3 per cent from the same period last year.

Outside of a smattering of earnings reports and corporate news, investors on Tuesday will closely examine the latest government data on retail sales in the US.

On Wednesday, the Fed will announce its latest decision on interest rates, with the unanimous expectation that the US central bank will cut its rate for the first time this year. Such a move could kickstart a slowing job market. Stocks have already run to records on the assumption that a cut will result from the two-day meeting that begins on Tuesday. Expectations are also high that the Fed will keep lowering rates through the end of this year and into 2026. That creates the possibility for disappointment in the market, which would mean falling stock prices, if the Fed doesn’t end up slashing rates as aggressively as traders expect.

That’s why more attention will be on what Fed Chair Jerome Powell says in his press conference following the decision than on the decision itself. Fed officials will also release their latest projections for where they see interest rates and the economy heading in upcoming years, which could provide another potential flashpoint. The Fed has been cautious with rate cuts because it feared a possible jump in inflation due to President Donald Trump’s tariffs. Lower interest rates can give inflation — which is already above the Fed’s 2 per cent target — more fuel and send it even higher. Elsewhere, in Europe at midday, the German DAX fell 0.5 per cent while Britain’s FTSE 100 dipped 0.3 per cent. France’s CAC 40 was flat. In Asia, Japan’s benchmark Nikkei 225 came off a holiday to momentarily reach above 45,000 points a few times during the session, finishing at a record 44,902.27, up 0.3 per cent from the previous close and the fourth straight session of record closes.