The stock market still has room for strong growth.

Many investors expect the Fed's interest rate cut to be a positive signal to help the stock market break out.

The Fed's interest rate cut will have an impact on foreign capital flows in the stock market. Photo: Quang Dinh Kafi

As expected by investors, the US Federal Reserve (Fed) has officially cut its operating interest rate by 0.25 percentage points, bringing the reference interest rate to 4 - 4.25%.

This is the first time Fed adjusts interest rates down from December 2024 and is considered the opening step for a monetary policy easing cycle in the context of cooling inflation and slowing US economic growth. Notably, the Fed also signaled that it will continue to reduce interest rates to support the economy in the coming time.

And of course, the question investors are asking now is will stocks rise or fall? Most investors consider the interest rate cut as a positive signal to help the market increase strongly. However, the reality is not always like that. expectations, because interest rates are not the only factor that determines 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 assume that this is a positive signal but wait to see if there is a major economic problem behind that decision. In the past, there was a time when the Fed sharply reduced interest rates from 5% to nearly 0% in the context of the global financial crisis. However, both the Dow Jones and VN-Index plummeted, despite the cheap money being pumped 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 the exchange rate in Vietnam, thanks to the interest rate gap between VND and USD being widened in a favorable direction. Regarding the direct impact on the stock market, the narrowing interest rate gap also contributes to limiting the net withdrawal of foreign capital,” Dr. Phuong commented.

In a newly published strategic report, An Binh Securities Company (ABS) assessed that market upgrading measures continue to be vigorously implemented, opening up a 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 favorable market in the medium term, the ABS analysis team proposed two scenarios. The first scenario is that the medium-term uptrend continues in sync at monthly trend levels. The bullish scenario is confirmed when the price signal maintains the 1,585-1,600 point range. The market is expected to increase to price ranges above the 1,700 point threshold.

In the second scenario, ABS believes that a deeper correction scenario may occur after the price has increased too strongly in the past 5 months, considered when the price on the weekly frame cannot maintain the support level of 1,586 - 1,600 points.

Source: https://baoquangninh.vn/thi-truong-chung-khoan-con-du-dia-tang-truong-manh-3376549.html