Global stock markets rose on Wednesday after the latest statements from the President of the Federal Reserve of the United States, Jerome Powell, reaffirmed that the organization expects to lower the official rate at some point this year.
The S&P IPSA rebounded by 1.41% to 6,347.20 points (preliminary) at the close of the Santiago Stock Exchange, partially recovering after recording its worst start to the week (Monday and Tuesday) since October 2022. Banco de Chile (3.79%), Concha y Toro (3.26%), and Bci (also 3.26%) led the session’s gains.
The rebound of Chilean banks this Wednesday followed the decline of long-term rates in the US, as the decrease in rates goes hand in hand with the decline in time deposits and greatly benefits banks, improving the interest margin. It was part of a reaction to Powell’s comments. The chairman has been consistent in at least some of the last two meetings, and the fact is that Powell reiterated that they will cut rates later this year.
It has been a positive day for stock markets overall. On Wall Street, the Nasdaq Composite surged by 0.66%, the S&P 500 climbed by 0.55%, and the Dow Jones rebounded by 0.2%. On the European front, the continental Euro Stoxx 50 rose by 0.46%, and London’s FTSE 100 gained 0.43%. In Asian markets, the Hong Kong Hang Seng advanced by 1.7%.
The markets shifted from expecting many rate cuts to starting to worry about whether the Fed would cut rates at all this year, and the fact that they have said they still want to cut rates is good news overall for the markets.
The intense fluctuations of the IPSA this week are due to SQM (2.38%) adding significant volatility to the index. With a trading volume of $12.413 billion, the Cencosud stock (2.95%) regained ground with the second-highest flow of the session, after reporting its results for the last quarter of 2023.
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