- When the Federal Reserve hinted at interest rate cuts for next year, stocks and bonds increased, rekindling the positive sentiment that permeates markets when inflation declines.
- With the S&P 500 closing Wednesday within 2% of its record high and rising further in Asian futures trading on Thursday, a global market barometer gained for a sixth straight day. Both the Dow Jones Industrial Average and Apple reached all-time highs.
- European equities futures saw growth in tandem with Hong Kong, South Korea, and Australia's stock indexes. Japan was the exception in the area, as the dollar index dropped to a four-month low and the yen gained ground against the US dollar, sometimes by as much as 1%.
- These actions came after the Fed's dovish signals on Wednesday, when it kept interest rates unchanged and indicated that rate cuts would be the next step. The dot plot revealed a reduction of 75 basis points in 2024, which is a faster rate of reduction than what was suggested in September. In order to ascertain whether developed-market counterparts are about to enter a global easing cycle, traders are currently anticipating the Bank of England and European Central Bank meetings, which are scheduled for later today.
- "The Federal Reserve has given the markets an early Christmas gift," stated Kellie Wood, Sydney-based Schröders' deputy head of fixed income. "A cut is the next step, and markets are now expecting a quicker and more aggressive cycle of easing." Wood predicts a wide, risk-on surge on Thursday that will result in "strong performance across all markets."
