(Bloomberg) — Global stocks rallied to all-time highs, with tech and commodity stocks leading the charge in Europe, as traders grew more confident on the path for lower interest rates.
Most Read from Bloomberg
The Stoxx 600 jumped 0.9% and S&P 500 futures signaled that US shares will rise for a fourth straight day. Micron Technology Inc. gained 18% in pre-market trading on the back of a higher-than-expected revenue forecast and strong demand for AI hardware.
Market optimism has been reignited after Federal Reserve policymakers kept their outlook for three cuts this year, despite a recent rebound in price pressures. While Chair Jerome Powell continued to highlight officials would like to see more evidence that prices are coming down, he also said it will be appropriate to start easing “at some point this year.”
“It’s a magnificent sea of green,” said Tony Sycamore, strategist at IG Australia. “There’s just a broad sense of relief that with the Fed out of the way for another six weeks, and with US yields seeming placated for now, it’s back to tech and the buzz around AI returning to the driver’s seat.”
Treasuries were steady and the dollar posted small moves. Brent crude traded above $86 a barrel and Bitcoin held around $67,000. Gold rallied above $2,200 an ounce for the first time.
In Europe, traders will turn their focus to the Bank of England today. The central bank likely to keep interest rates at a 16-year high, giving more time for inflationary pressures to cool.
Futures on the S&P 500 rose 0.5% and contracts on the tech-heavy Nasdaq 100 index added 0.9%, after surging Wednesday amid a rally in the Magnificent Seven group of mega-cap stocks. US small-caps, which typically do well when the economy is expanding, also notched the best session in a month.
“The Fed appears to have achieved a better balance around its dual mandate of price stability and maximum employment,” Banco Bilbao Vizcaya Argentaria analysts wrote in a note. “This suggests that it will soon begin to normalize its policy stance, probably in June, although it will proceed cautiously even after that.”
Corporate Highlights:
-
Barclays Plc is preparing to cut several hundred jobs within its investment bank division as the firm embarks on a yearslong effort to trim costs and boost profits within the unit, according to people familiar with the matter.
-
Japan Airlines Co. said it will purchase 42 new Boeing Co. and Airbus SE aircraft in a multibillion dollar order to expand its international network.
-
BMW AG said it expects a margin of 8-10% for its automotive segment this year and deliveries to increase slightly. Top-end electric vehicles will drive growth this year, it said, as faltering global demand for EVs weighs on the auto industry.
-
Nationwide Building Society has agreed to purchase Virgin Money UK Plc for £2.9 billion ($3.7 billion) in a cash deal that is set to reshape Britain’s banking landscape.
Key events this week:
-
Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, Thursday
-
Bank of England rate decision, Thursday
-
US Conference Board leading index, existing home sales, initial jobless claims, Thursday
-
Nike, FedEx earnings, Thursday
-
Japan CPI, Friday
-
Germany IFO business climate, Friday
-
Atlanta Fed President Raphael Bostic speaks, Friday
-
ECB’s Robert Holzmann and Philip Lane speak, Friday
Some of the main moves in markets:
Stocks
-
The Stoxx Europe 600 rose 0.9% as of 8:04 a.m. London time
-
S&P 500 futures rose 0.5%
-
Nasdaq 100 futures rose 0.9%
-
Futures on the Dow Jones Industrial Average rose 0.4%
-
The MSCI Asia Pacific Index rose 2%
-
The MSCI Emerging Markets Index rose 1.7%
Currencies
-
The Bloomberg Dollar Spot Index was little changed
-
The euro was little changed at $1.0927
-
The Japanese yen was little changed at 151.25 per dollar
-
The offshore yuan was little changed at 7.2128 per dollar
-
The British pound was little changed at $1.2788
Cryptocurrencies
-
Bitcoin was little changed at $67,046.01
-
Ether rose 1.8% to $3,525.49
Bonds
-
The yield on 10-year Treasuries declined one basis point to 4.26%
-
Germany’s 10-year yield was little changed at 2.44%
-
Britain’s 10-year yield was little changed at 4.01%
Commodities
-
Brent crude rose 0.6% to $86.43 a barrel
-
Spot gold rose 0.9% to $2,205.56 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Chiranjivi Chakraborty.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.