A week-long global stock rally lost momentum on Friday as Asian markets faltered amid growing uncertainty about the U.S. Federal Reserve’s path on interest rate cuts.
The MSCI All Country World Index dipped 0.2%, snapping its longest winning streak since January. In Asia, Hong Kong’s Hang Seng Index fell 1.1%, while Japan’s Topix index dropped 0.8%, retreating from its record-high close the day before.
Investor sentiment weakened following Thursday’s strong U.S. jobs data, which dampened expectations for imminent monetary easing by the Fed. Jobless claims fell for the sixth straight week, prompting traders to scale back bets on aggressive rate cuts. Markets are now pricing in fewer than two reductions this year.
Federal Reserve Governor Christopher Waller had earlier signaled support for a rate cut this month to shore up the labor market. However, the stronger-than-expected employment data has raised doubts about whether the central bank will act as soon as anticipated.
Meanwhile, the U.S. dollar edged up 0.2% after President Donald Trump commented that firing Fed Chair Jerome Powell was “not necessary.” U.S. Treasury yields were flat following two days of declines.
Gold prices held their recent losses, and Bitcoin slumped 3%. U.S. equity-index futures rose 0.2%, while European contracts were largely unchanged.
