US stocks retreat as profit-taking hits mega-cap tech. Fed rate cut bets intensify, weighing on the US dollar. Asian markets rally, with the AUD outperforming on strong inflation data.
AUD outperformed as Australia’s CPI hit a 13-month high, bullish reversal in Hong Kong stocks
The major US stock indices pulled back on Tuesday, 23 September, ending a three-day winning streak as profit-taking emerged in mega-cap technology names. The Nasdaq 100 led the decline, slipping 0.7%, while the S&P 500 lost 0.5%. The Dow Jones Industrial Average and small-cap Russell 2000 fared relatively better, each easing -0.2%.
Fed Chair Powell’s speech painted a balanced picture between upside risk in inflation and downside risk in the US labour market. Hence, he offered no hints of a rate cut in the
Despite Chair Powell’s balanced remarks, Fed funds futures traders have ramped up expectations for an October rate cut. The probability of a 25-basis-point reduction at the 29 October 2025 FOMC meeting, bringing the Fed funds rate to 3.75%-4.00%, has risen to 94%, up from 90% just a day earlier.
Rising bets on Fed rate cuts weighed on the US dollar, with the US Dollar Index slipping for a second straight session on Tuesday, 23 September. It eased -0.1%, falling below its 20-day moving average near 97.60, which continues to cap as intermediate resistance.
In today’s Asian session, the outlier in the FX market has been the Australian dollar, as it outperformed among the major currencies against the greenback. The AUD/USD staged an intraday rally of 0.3% at the time of writing, reinforced by a hotter than expected Australia’s monthly CPI print for August to rise to a 13-month high of 3.0% y/y from 2.8% in July, beating expectations of 2.9%.
Asia Pacific stock markets fared better than their US counterparts. Japan’s Nikkei 225 recovered from an earlier intraday loss of -06% to record a gain of 0.3% as it sought to retest its current all-time intraday high of 45,853 printed last Friday, 19 September.
Hong Kong’s Hang Seng Index staged a bullish reversal to put a halt to its prior 4-day decline. It rallied by 1.5%, on track for its best daily return since last Wednesday, 17 September, led by China Big Tech stocks.
Our YouTube video above contains the latest intraday technical analysis on the US Wall Street 30, US Nas 100, US SPX 500, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil.
