Wall Street rallies while expectations of peaked U.S. interest rates boost market sentiment worldwide.
NEW YORK/SYDNEY – The U.S. dollar fell to its weakest point in over two months on Monday, fueled by growing expectations that U.S. interest rates have peaked. Meanwhile, Wall Street’s major stock indexes closed at multi-month highs, buoying global markets.
Equities across the globe saw gains, with the MSCI World Equity Index rising by 0.71 percent. U.S. Treasury yields dropped following an auction, and oil prices surged by $2, anticipating potential supply cuts.
Wall Street Reaches Multi-Month Highs
The Nasdaq registered its best close since July 31, with the S&P 500 hitting levels not seen since August. Gains were led by the tech sector, as Microsoft achieved record highs.
Dow Jones Industrial Average: Up 203.76 points (0.58%) to 35,151.04
S&P 500: Up 33.36 points (0.74%) to 4,547.38
Nasdaq Composite: Up 159.05 points (1.13%) to 14,284.53
Japanese shares also hit 1990-era highs, spurred by strong corporate earnings and overseas demand. Despite profit-taking on the Nikkei, it remains up 8.2 percent for November so far.
Dollar Weakens, Markets Eye Fed’s Next Move
The dollar index fell 0.42 percent, hitting levels last seen in early September, as markets largely ruled out further rate hikes this year. Investors anticipate minutes from the Federal Reserve’s last meeting to provide clarity on future policy, with dovish indications potentially putting additional pressure on the dollar.
“Signs of progress in the battle against inflation in the U.S. have fueled stock market recovery this year,” noted Ricardo Evangelista, a senior analyst at ActivTrades.
Black Friday and Economic Indicators in Focus
The upcoming Thanksgiving holiday week in the U.S. is expected to bring muted trading activity. Black Friday and Cyber Monday sales will serve as key indicators of consumer resilience in the face of inflationary pressures.
“The market will closely watch consumer spending trends,” said Quincy Krosby, chief global strategist at LPL Financial.
European and Global Markets
Europe’s STOXX index edged up 0.1 percent, led by gains in energy stocks. Italian and Portuguese bonds rallied after Moody’s upgraded their credit outlooks, easing sovereign debt concerns.
Investors are also awaiting European manufacturing surveys, with any signs of weakness likely to amplify bets on European Central Bank rate cuts as early as April 2024.
Oil Prices Rise, Commodities in Focus
Oil prices climbed amid speculation that OPEC+ may extend or deepen production cuts during its Nov. 26 meeting.
Brent crude: Up 2.1% to $82.32 per barrel
U.S. crude: Up 2.3% to $77.60 per barrel
Meanwhile, gold futures dipped slightly, settling at $1,980.30 an ounce, reflecting cautious investor sentiment amidst broader market optimism.
Looking Ahead
As global markets respond to shifting monetary policies, the trajectory of U.S. interest rates, inflation data, and consumer behavior during the holiday season will be pivotal in shaping near-term economic outlooks.
