Trade Secrets

WTF Dailies September 24, 2025

Most Asian stocks retreated on Wednesday tracking overnight losses on Wall Street amid growing uncertainty over the path of U.S. interest rates, with technology shares losing more ground after a strong rally in recent weeks.

Sage Kakkat

23 Sep 2025 — 6 min read

US stock futures ticked up after Wall Street ended a record-setting rally.
Stocks slid on Tuesday after Federal Reserve Chair Jerome Powell's speech in Rhode Island underscored that low employment and high inflation leave the central bank with "no-risk free path." While Powell left the door open to further rate cuts this year, he signaled the Fed would approach additional reductions with caution. The Fed chair also described stocks as "fairly highly valued."
In after-hours trading, Micron Technology (MU) rose after its results exceeded Wall Street expectations. Investors had been watching the company's results as a key indicator for the AI trade.
Wall Street is now counting down to the release of the Fed's preferred inflation gauge, the Personal Consumption Expenditures index, on Friday. Following Powell's speech, traders are eager for reassurance that inflation isn't posing a threat to high expectations for two more rate cuts this year.
Most Asian stocks retreated on Wednesday tracking overnight losses on Wall Street amid growing uncertainty over the path of U.S. interest rates, with technology shares losing more ground after a strong rally in recent weeks.
Weak purchasing managers index data from Japan and hotter-than-expected Australian consumer inflation data also weighed on sentiment.
Chinese stocks were an outlier, clocking mild gains on some optimism over more stimulus measures from Beijing. Chinese tech shares also recovered some ground after declining earlier this week.
Japan’s Nikkei 225 and TOPIX indexes fell 0.4% and 0.2%, respectively, as trade resumed after a holiday on Tuesday.
PMI data showed Japan’s manufacturing sector shrank more than expected in September, while growth in the services sector moderated slightly. Overall Japanese business activity also grew at its slowest pace in four months.
The print highlighted continued weakness in Japanese manufacturing, especially as major local industries such as automobiles and steel grapple with high U.S. trade tariffs.
But Japanese stocks still remained close to record highs hit last week, as increasing political uncertainty in the country spurred bets that interest rates will not rise in the near-term.
Australia’s ASX 200 index was among the worst performers in Asian markets, sliding 1% as hotter-than-expected consumer price index inflation dented bets on more interest rate cuts by the Reserve Bank.
CPI data showed inflation rising 3% year-on-year in August, more than expectations of 2.9%. Underlying inflation also remained high, while core inflation– which excludes volatile items– remained well above the RBA’s 2% to 3% annual target.
Sticky inflation gives the RBA less impetus to cut interest rates, with the central bank also having flagged caution over future cuts due to sticky prices. The central bank cut rates by a total 75 basis points so far in 2025.
Broader Asian markets mostly kept to a flat-to-low range. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes were mildly positive, while Hong Kong’s Hang Seng index rose 0.2%.
South Korea’s KOSPI fell 1.1%, and was the worst hit by losses in regional technology stocks. Memory chip makers Samsung Electronics Co Ltd (KS:005930) and SK Hynix Inc (KS:000660) fell 0.8% and 2.2%, respectively, following positive earnings from U.S. rival Micron Technology Inc (NASDAQ:MU).
Singapore’s Straits Times index shed 0.1%, while futures for India’s Nifty 50 index fell 0.1%, pointing to extended losses in the index amid heightened concerns over the impact of stricter U.S. immigration policies.

Market Close

U.S. stocks fell for a second consecutive session but remain close to all-time highs. Laggards included tech, industrials, pharma and telecom companies, with energy and consumer staples notable outperformers. This dip contrasts with strong gains across most Asian equity markets overnight, while European stock benchmarks were mixed.
A sell-off in U.S. government bond markets, with yields continuing to drift higher after the Fed interest-rate cut last week. The dollar is rallying as yields rebound somewhat, with the greenback up 0.5% against a basket of trade-weighted currencies.
Oil was up 2.5% today and 4% so far this week, supported by comments from President Trump that Ukraine could recover all the territory lost in the conflict with Russia. WTI is now trading at the top end of the $60-$65 range seen through much of the last couple of months.
With just over a week left in the third quarter, analysts are looking for S&P 500 earnings to increase 7.7% compared with the same quarter last year. These gains were expected to be relatively broad-based, with eight out of 11 sectors expected to deliver positive earnings growth, although the tech sector is the clear standout, with analysts penciling in 20%-plus gains across the cohort, with those in the semiconductor sector up an even larger 45%.
There has been a raft of Fed speakers in recent sessions, as FOMC members look to outline their views after last week's interest-rate cut. Yesterday's comment from Fed Chair Powell largely reiterated the messages he provided at that meeting, with Powell hinting that interest rates should be moving toward less restrictive levels, but not providing a great deal of clarity over the timing and extent of this adjustment. The more dovish Fed Governor Bowman was more forthcoming, warning that the central bank risked falling behind the curve and calling for decisive action on cuts. By contrast, regional Fed Presidents Bostic and Goolsbee took a more cautious stance, flagging some of the risks around inflation, and arguing that the central bank has time to move carefully. These splits highlight the difficult balancing act facing Fed Chair Powell, who has signaled that upcoming data will help settle these debates. In our view, this puts high importance on upcoming labor and inflation data to validate, or not, market expectations for Fed rate cuts in both October and December.

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