US equity markets closed mixed following the Fed’s decision to raise rates by 25bps as investors assess the latest comments from Fed chair Powell. The Dow Jones seesawed but ended higher, up 82 points (+0.23%) for the 13th straight session, tying the record set in January 1987. Dow at best up 196 points. Dow at worst down 132 points. S&P 500 was flat, down 0.02%, and the NASDAQ fell 0.12%. US treasury yields slipped in choppy trading, and the dollar edged lower against major currencies, with the USD Index down 0.48%. The VIX volatility index (Wall Streets' fear gauge) fell almost 5%, down 4.8% to 13.19. Among stocks, Alphabet +5.77% on upbeat earnings, Microsoft -3.77% after laying out its spending plan to meet the demand for its new AI-powered services, and Snap sank 14.2% on weaker than expected Q3 forecast.

• ASX to open flat. SPI Futures down 1 point (-0.01%).

FOMC Meeting: The Federal Reserve has hiked rates by 25bp to 5.25-5.50%, as expected, following a unanimous vote by the FOMC. The economic growth characterisation shifted from "modest" to "moderate." Chair Powell emphasised a data-dependent approach, and while some positive disinflationary signals were noted, core CPI remains elevated. Market expectations on further rate hikes remain uncertain.

• Russell 2000 +0.72%
• Meta +1.3%, and shares are up 7.24% in after-hours trade following strong financial results for Q2, surpassing Wall Street expectations in advertising revenue (+12% in the quarter) and providing a positive outlook for the third quarter.  

European markets are broadly lower but off worst levels ahead of the ECB’s interest rate decision today. FTSE 100 -0.19% DAX -0.49% CAC40 -1.35% STOXX 600 -0.53%. The ECB is poised to raise its key rates by 25bps bringing the deposit rate to 3.75%. Lagarde already hinted at this move during the June meeting, effectively preannouncing it, which has reduced uncertainty surrounding this week's decision. Attention now shifts to the guidance provided for the period leading up to the next meeting in September. Asian markets mixed. China stocks retreat, indicating Beijing needs to act quickly on pledge Hang Seng -0.36%, Shanghai -0.26%, Shenzhen -0.47%, ChiNext -0.08%.

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