Not beyond investors' expectations, the US Federal Reserve (Fed) has officially cut the operating interest rate by 0.25 percentage points, bringing the reference interest rate to 4 - 4.25%.
This is the first time the Fed has adjusted interest rates down since December 2024 and is considered the first step in a monetary policy easing cycle in the context of cooling inflation and signs of slowing US economic growth. Notably, the Fed also signaled that it will continue to cut interest rates to support the economy in the coming time.
And of course, the question investors are asking now is will stocks increase or decrease? Most investors consider the interest rate cut as a positive signal to help the market increase sharply. However, in reality, it is not always as expected, because interest rates are not the only factor determining market trends.
Dr. Nguyen Duy Phuong, Investment Director of DG Capital, said that interest rates are only part of the big picture. Investors should not destin it as a positive signal but wait to see if there is any major economic problem hidden behind that decision. There have been times when the Fed cut interest rates sharply from 5% to nearly 0% in the context of the global financial crisis. However, both Dow Jones and VN-Index both plummeted, despite the pumped-in of cheap cash flow into the system. The market does not necessarily increase when interest rates decrease and does not always decrease when interest rates increase.
However, in general, this is still a positive signal for the global financial market. The decrease in USD interest rates will reduce pressure on exchange rates in Vietnam, thanks to the interest rate gap between VND and USD being widened in a beneficial direction. Regarding the direct impact on the stock market, the narrowing interest rate gap also contributes to limiting foreign capital withdrawal, said Dr. Phuong.
In the newly published strategy report, An Binh Securities Company (ABS) assessed that market upgrade measures continue to be vigorously implemented, opening up the high possibility that the Vietnamese stock market will be upgraded to the " emerging market" group in October 2025. This will be an important milestone, which can attract more international investment funds with a scale of billions of USD.
Assessing the market as favorable in the medium term, the ABS analysis team proposed 2 scenarios. The first scenario is that the medium-term uptrend is continuing to synchronize across monthly trend levels. The price increase scenario was confirmed when the price signal remained stable in the 1,585-1,600 point range. The market expects to increase to price zones above the threshold of 1,700 points.
In the second scenario, ABS believes that a deeper correction scenario could happen after prices have increased too strongly in the past 5 months, considered when prices above the weekly framework could not hold the support level of 1,586 - 1,600 points.
