Asia Market Quick Take – October 30, 2025

Asia Market Quick Take – October 30, 2025

Key points:

• Macro: US, Canada and Hongkong cuts rates by 25bps
• Equities: Meta fell 7% on $15.93B charge; Microsoft -4% on $3.1B impact; Alphabet rose 7% on sales beat
• FX: Dollar index rose past 99 after Powell's hawkish remarks and rate cut
• Commodities: Gold remains below $4,000 as yield pushes up US dollars
• Fixed income: US Treasuries slumped; up-to-7Y yields rose at least 10bp

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Disclaimer: Past performance does not indicate future performance.

Macro:

• The Federal Reserve cut the federal funds rate by 25 bps to 3.75%–4.00%, the lowest since 2022, due to employment risks and high inflation. Governor Miran preferred a 50bps cut; Kansas City Fed's Schmid dissented against the cut. Chair Powell said a December cut isn't certain, but investors expect another 25bps reduction. The Fed will stop reducing securities holdings on December 1.
• The Bank of Canada cut its benchmark rate by 25bps to 2.25% and may end cutting if the economic outlook remains stable. This follows a previous rate cut amid US tariffs and a slowing job market. Despite a 1.6% GDP contraction in Q2 due to trade conflicts, the BoC expects GDP to grow by 1.2% this year and 1.1% next year, with core inflation around 3% moving toward the target.
• The Hong Kong Monetary Authority reduced its base rate by 25 bps to 4.25%, following the U.S. Federal Reserve's lead. This was HKMA's second rate cut in 2025, after a similar reduction in September, reflecting Hong Kong's policy alignment with the U.S. due to its pegged currency.

Equities: 

• US - The S&P 500 rose 0.2% and Nasdaq gained 1%, both hitting new records, while the Dow slipped 30 points. Markets initially rallied on the Fed’s 25bp cut and plans to halt balance sheet runoff, but Powell’s comments lifted yields and trimmed gains. Mega-cap tech led: Nvidia jumped 3.6%, briefly topping $5T on reports Trump may allow Blackwell chip exports to China; Broadcom, AMD, and Micron rose over 2%. Cyclicals and defensives lagged, while strong earnings from Caterpillar, Verizon, CVS, and Fiserv offered support. Meta fell over 7% after market due to a $15.93 billion charge linked to Trump's One Big Beautiful Bill Act. Microsoft declined over 4% after market after its OpenAI investment reduced earnings by $3.1 billion. Conversely, Alphabet jumped nearly 7% after market on positive results.
• EU - The STOXX 50 rose 0.4% and the STOXX 600 increased 0.2% after a slow start, driven by positive corporate earnings as traders anticipated the FOMC decision. Autos and banks led gains, while travel, leisure, household goods, and insurance lagged. UBS climbed 2.3% on strong profit results, GSK increased 4% after enhancing its outlook, and Deutsche Bank grew 3% on unexpected earnings. Santander rose 1.5% with a record consecutive profit, Mercedes-Benz jumped 6% after reaffirming guidance and resuming share buybacks, and Next surged 4.9% after a profit outlook boost. Conversely, Equinor fell over 1% due to unforeseen profit declines, SAP dropped 1.4%, and Adidas decreased 1% amid US tariff concerns.
• CN - The Shanghai Composite rose 0.7% to 4,016, and the Shenzhen Component increased 1.95% to 13,691, hitting a ten-year high as investors awaited the Xi-Trump meeting. Trump signaled lower fentanyl tariffs, and China resumed US soybean purchases. Ping An Insurance gained over 2% with an 11.5% profit rise, while Bank of China reached two-month highs with a 5% profit increase in Q3. AI stocks like Sungrow Power rose between 1.5% and 15.4%.