UPDATE: Global stock markets are surging today as investors react to rising hopes that the Federal Reserve will cut interest rates soon. Following a significant rally on Wall Street, European and Asian shares have mostly gained ground, reflecting optimism in the financial markets.
U.S. stocks soared on Monday, with the S&P 500 climbing 1.5% in one of its best performances since summer. The Dow Jones Industrial Average saw a 0.4% increase, while the Nasdaq composite jumped a remarkable 2.7%. This surge is largely attributed to increased speculation that the Fed will implement another interest rate cut at its next meeting in December, a move that could invigorate economic growth and boost investment prices.
In early trading on Tuesday, futures for the S&P 500 and the Dow slipped 0.1%, while Germany’s DAX edged lower by 0.1% to 23,216.76. The CAC 40 in Paris added 0.1% to 7,965.77, and Britain’s FTSE 100 gained 0.1%, reaching 9,542.55.
In Asia, the Nikkei 225 in Tokyo rose 0.1% to 48,659.52, despite a significant plunge of 10.3% in shares of SoftBank, driven by fears regarding the profitability of its investments in OpenAI. Conversely, South Korea’s Kospi gained 0.3% to 3,857.78, while Taiwan’s Taiex surged 1.5%.
Chinese markets also showed positive momentum, with the Hang Seng index climbing 0.7% to 25,894.55 and the Shanghai Composite rising 0.9% to 3,870.02. E-commerce giant Alibaba gained 2.1% ahead of its earnings report scheduled for later today.
Traders are closely monitoring economic indicators, particularly the upcoming government report on inflation, due Tuesday, which is expected to show a 2.6% increase in wholesale prices year-over-year. This data will be crucial; a higher-than-expected reading could deter the Fed from making further cuts to the interest rate, which has already been lowered twice this year.
Despite prevailing uncertainties, traders are increasingly optimistic, with a nearly 85% probability now placed on a rate cut next month, up from 71% just last Friday. This sentiment follows sharp fluctuations in market performance over the past few weeks, driven by investor concerns over inflation and the volatility in technology stocks, spurred by the AI sector’s recent boom.
In commodities, U.S. benchmark crude oil prices fell by 47 cents to $58.37 per barrel, while Brent crude dropped 49 cents to $62.23 per barrel. The dollar weakened against the Japanese yen, trading at 156.30 yen, down from 156.91. The euro rose slightly to $1.1534, and Bitcoin gained 1.6%, now valued at $86,836.
As Thanksgiving approaches, U.S. markets will be closed on Thursday, marking the start of the crucial shopping season that includes Black Friday and Cyber Monday. With significant economic data and market developments on the horizon, investors are poised for what could be a pivotal week in the financial landscape. Stay tuned for updates as the situation unfolds.
