Global Markets Mixed As Fed Signals Uncertainty, Alibaba Soars On $53bn AI Push

Equities swung unevenly on Wednesday after Wall Street closed lower, as investors weighed high valuations against mixed signals from the US Federal Reserve over its rate path.

The months-long rally, fueled by optimism over multiple Fed rate cuts this year, stalled on Tuesday with tech giants like Nvidia and Amazon dragging New York’s major indexes down from record highs.

Fed Chair Jerome Powell warned there was “no risk-free path” in monetary policy, stressing that easing too quickly could reignite inflation while holding too tight could weaken jobs. Other officials also sent conflicting messages, Atlanta Fed’s Raphael Bostic and Chicago’s Austan Goolsbee cautioned about persistent inflation, while Governor Michelle Bowman urged immediate rate cuts to counter a weakening labour market.

Markets now await Friday’s release of the Fed’s preferred inflation gauge, the Personal Consumption Expenditure (PCE) index, followed by key US jobs data next week.

Meanwhile in Asia, Alibaba shares surged over 9% in Hong Kong after CEO Eddie Wu announced plans to pour $53 billion (380 billion yuan) into artificial intelligence infrastructure, pledging to multiply Alibaba Cloud’s data centre capacity tenfold by 2032. The announcement lifted other Chinese tech names, including Tencent, JD.com, and Meituan.

Elsewhere, Tokyo, Jakarta, Bangkok, and Wellington gained ground, while Sydney, Seoul, Singapore, Taipei, and Manila slipped. European bourses in London, Frankfurt, and Paris also opened lower.

Key figures showed the Nikkei up 0.3%, the Hang Seng up 1.4%, and the Shanghai Composite up 0.8%, while oil prices were largely steady and major currencies moved modestly.