The US Federal Reserve held interest rates steady for the third time running, keeping its benchmark federal funds rate at 4.25%-4.50% as officials flagged rising risks of higher inflation and unemployment. “Uncertainty about the economic outlook has increased further. The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen,” the Fed’s Federal Open Market Committee (FOMC) wrote in its statement.

No rush to act amid murky outlook: Fed Chair Jerome Powell struck a cautious tone in his post-meeting press conference, saying the Fed is “well positioned to respond in a timely way to potential economic developments.” Powell added, “we think we’re in the right place to wait and see how things evolve. We don’t feel like we need to be in a hurry.” On tariffs, he admitted that trade policy remains a wildcard. “I don’t think we can say which way this will shake out.” He warned that if Trump’s “large increases in tariffs” are sustained, they could “generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment.”

Jobs data strong, but inflation still hot: The labor market remained resilient in April, with employers adding 177k jobs and the unemployment rate holding at 4.2%. Meanwhile, the Fed’s preferred inflation gauge — the PCE index — rose 2.3% y-o-y in March, surpassing market expectations.

Markets reax: Stocks rose following the Fed’s announcement — the S&P 500 rose 0.4%, the Nasdaq was up 0.4%, and the Dow Jones rose 0.7%. Meanwhile, the yield on the 10-year US Treasury note fell 3 bps to 4.27%.

Policy on pause, for now: “The Fed remains in a holding pattern as it waits for uncertainty to clear,” said Goldman Sachs Asset Management’s Ashish Shah. “The onus is on the labor market to weaken sufficiently to bring a resumption of its easing cycle.”

The story got a lot of ink on international press: Bloomberg | Reuters | FT | CNBC | The Washington Post | New York Times.

MARKETS THIS MORNING-

Asian markets are in the green this morning. Japan’s Nikkei is up 0.4%, the Shanghai Composite is looking at gains of 0.3%, the Hand Seng is up 0.4%, and Korea’s Kospi is up a modest 0.1%.

TASI

11,399

-0.3% (YTD: -5.3%)

MSCI Tadawul 30

1,456

-0.1% (YTD: -3.6%)

NomuC

27,778

-0.6% (YTD: -11.8%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

5.0% repo

4.5% reverse repo

EGX30

31,840

-1.4% (YTD: +7.1%)

ADX

9,610

-0.1% (YTD: +2.0%)

DFM

5,338

-0.3% (YTD: +3.5%)

S&P 500

5,631

+0.4% (YTD: -4.5%)

FTSE 100

8,559

-0.4% (YTD: +4.7%)

Euro Stoxx 50

5,230

-0.6% (YTD: +7.7%)

Brent crude

USD 61.41

-1.2%

Natural gas (Nymex)

USD 3.60

+0.1%

Gold

USD 3,385.18

-1.9%

BTC

USD 96,716.00

+2.3% (YTD: 3.6%)

Sukuk/bond market index

911

-0.1% (YTD: +1.0%)

S&P MENA Bond & Sukuk

143.3

-0.3% (YTD: +2.4%)

VIX (Fear gauge)

24.17

-2.4% (YTD: +39.3%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.3% yesterday on turnover of SAR 4.8 bn. The index is down 5.3% YTD.

In the green: Nahdi (+7.3%), Chemical (+4.9%) and SSP (+4.2%).

In the red: Leejam Sports (-10.0%), Zain KSA (-8.3%) and Wataniya (-7.8%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.6% yesterday on turnover of SAR 20.9 mn. The index is down 11.8% YTD.

In the green: FADECO (+9.4%), Alashghal Almoysra (+5.1%) and Taqat (+4.9%).

In the red: Future Care (-11.5%), Enma Alrawabi (-9.4%) and Knowledge Tower (-9.1%).

CORPORATE ACTIONS-

Arabian Internet and Communications Services’ (solutions) shareholders greenlit a SAR 1.19 bn dividend payout for FY 2024 at SAR 10 apiece, it said in a disclosure to Tadawul. The dividends will be distributed starting on 27 May.

Saudi Steel Pipe’s BoD recommended a SAR 199.6 mn dividend for FY 2024 at SAR 3.95 per share, with SAR 50.5 mn in regular dividends at SAR 1 per share and SAR 149.1 mn in extraordinary dividends at SAR 2.95 per share, according to a disclosure to Tadawul. The distribution date has yet to be determined.

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