KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
U.S. equities stalled Monday, with Treasury yields climbing as investors reassessed the Federal Reserve’s dovish tilt against still-stubborn inflation. The pullback comes just days before the release of July PCE data, which could prove pivotal in shaping the September policy decision.
Fed Policy Debate Intensifies
Powell’s Jackson Hole remarks reinforced expectations for a September rate cut, but officials remain divided on the pace of easing.
Markets are bracing for PCE core inflation at 2.9% YoY — the fastest in five months. That complicates the Fed’s balancing act between a weakening labor market and inflation above its 2% target.
Money markets: ~80% odds of a September cut, with two cuts priced in by year-end.
“While a September cut looks likely, the real debate is whether it’s a dovish or hawkish cut,” said Andrew Brenner, NatAlliance Securities.
Market Moves
S&P 500: −0.4%, with 400 stocks in the red.
Nvidia (NVDA.US) gained ahead of earnings, while Alphabet (GOOGL.US) hit an all-time high.
10Y Treasuries: yields +3bps to 4.28%.
Dollar: firmed after recent weakness.
Strategists warn of “air pockets” if inflation surprises on the upside or if labor data comes in stronger than expected.
Small-Cap Tailwinds from Easing
Glenmede noted that small caps, burdened by floating-rate debt, stand to benefit disproportionately if easing resumes. Lower borrowing costs could provide earnings relief into year-end.
Nvidia in Focus
The broader market’s near-term trajectory hinges on Nvidia’s Aug 27 earnings:
Nvidia now accounts for nearly 8% of the S&P 500.
Roughly 40% of revenue comes from hyperscalers like Meta, Microsoft, Alphabet, and Amazon.
Elevated expectations mean even strong results risk disappointing.
“The only question is whether results will be good enough to push the stock higher after almost doubling in 4–5 months,” said Matt Maley, Miller Tabak.
AI spending has fueled market gains for two years; Nvidia’s report will test whether this momentum is sustainable or increasingly stretched.
Strategic Takeaway
Short-term risk: inflation data could undercut easing bets.
Medium-term risk: Fed’s leadership transition (Powell’s term ends May 2026) may mark a dovish policy shift, but near-term divergence among officials keeps volatility elevated.
Market driver: Nvidia earnings have become a proxy for AI confidence — and by extension, the durability of the U.S. equity rally.
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