Global Stock Markets Rise, Investors Anticipate Another Rate Cut

The Dow Jones increased by 1.43 percent, to 47,112 points, while the S&P 500 rose by 0.91 percent, to 6,765 points, and the Nasdaq index by 0.67 percent, to 23,025 points.

Yesterday, a series of macroeconomic data was released, showing that in September, American consumption grew slower than expected, and inflation, according to producer prices, eased.

This has solidified investors’ belief that the Fed will indeed lower interest rates once more this year by 0.25 percentage points, as it did in September and October.

Currently, the market estimates that there is about an 85 percent chance that the central bank will cut rates in December, while those odds were around 40 percent last week.

– After the last Fed meeting, central bank chairman Jerome Powell indicated that rates could remain unchanged until the end of the year. However, following comments from several Fed governors, expectations have significantly shifted – from the Fed not changing anything in December to the possibility of rate cuts due to weakness in the labor market – explains Paul Nolte, a strategist at Murphy & Sylvest.

As a result, in the first two days of this week, the indices have recovered all losses from last week, when they sharply fell due to pressure on the technology sector.

This working week in the U.S. will be shortened, as there will be no trading on Thursday due to Thanksgiving, while trading on Wall Street will be shortened on Friday.

The value of the dollar has sharply fallen

Investors will also focus on news about retail and online sales at the end of the week as the pre-holiday shopping season begins.

European stock prices also rose yesterday. The London FTSE index increased by 0.78 percent, to 9,609 points, while the Frankfurt DAX rose by 0.97 percent, to 23,464 points, and the Paris CAC by 0.83 percent, to 8,025 points.

The MSCI index of Asia-Pacific stocks, excluding Japan, was up about 1 percent around 7:00 AM, marking its third consecutive day of gains. Stock prices in Shanghai, Hong Kong, Australia, India, Japan, and South Korea rose between 0.1 and 2.4 percent.

In the currency markets, the value of the dollar against a basket of currencies has sharply fallen as expectations for Fed rate cuts have solidified.

The dollar index, which shows the value of the U.S. dollar against the other six major world currencies, is around 99.67 points this morning, while it was 100.23 points at the same time yesterday. The dollar’s exchange rate against the Japanese currency slid from yesterday’s 156.70 to 155.75 yen.

The U.S. currency has also weakened against the euro, with the euro price reaching 1.1585 dollars, compared to 1.1515 dollars at the same time yesterday. Oil prices, on the other hand, have recovered some of yesterday’s losses. In the London market, the price of a barrel has increased by 0.35 percent, to 62.70 dollars, while in the U.S. market, a barrel has risen by 0.30 percent, to 58.15 dollars.