Markets React as PBoC Stands Firm and Trump Shifts Tech Visa Policy

NEW YORK, NY – US stock futures experienced a downturn on Monday, September 22, as traders adjusted their expectations following monetary policy announcements from the People’s Bank of China (PBoC) and surprising moves from former President Donald Trump.

The PBoC opted to keep the one-year and five-year loan prime rates steady at 3% and 3.5%, respectively. This decision comes amid rising unemployment and weakened demand within China. Analysts had anticipated that lowering interest rates might stimulate consumer spending and cushion the impact of US tariffs.

Further complicating market dynamics, Trump proposed an annual fee of $100,000 for companies hiring high-skilled foreign workers under the H-1B visa program. This announcement has sparked concern across the tech sector, particularly since many firms rely on talent from countries like China and India. If adopted, this new fee could sharply increase operating costs and jeopardize profit margins, potentially affecting share prices.

The announcement followed a Friday call with Chinese President Xi Jinping, which had reportedly been met with optimism. However, the visa rule suggests a ripple of uncertainty in US-China relations just before the expiration of a temporary tariff agreement.

Despite these challenges, a weaker Japanese yen provided some relief, with the USD/JPY pair rising 0.26% to 148.339. This movement has also improved demand for Japanese stocks, reflected in a 1.55% rise in the Nikkei 225 index.

Financial experts noted that traders should keep an eye on the USD/JPY pair and the Nikkei 225 index, as fluctuations could indicate changes in market sentiment. Last week, the Bank of Japan (BoJ) decided to maintain its interest rates, although dissent among policymakers about future hikes has sparked speculation about potential changes in October.

While US stock futures faced pressure with the Dow Jones E-mini dropping 81 points and both the Nasdaq 100 and S&P 500 indices declining, the market remained above critical moving averages. This suggests a short-term bullish outlook, contingent upon upcoming economic developments.

Later today, the Federal Reserve is expected to dominate headlines. Notable speeches from Fed Vice Chair John Williams and other Federal Open Market Committee members could clarify the outlook for monetary policy easing in the coming months.

Important economic indicators are on the horizon, including the US S&P Global Services PMI due on September 24 and jobless claims on September 25, which may provide insights into economic momentum and influence stock market trends.