Global markets continued their upward trajectory, with European and U.S. futures rising alongside Asian stocks, as investor optimism grew on the expectation that the Federal Reserve may soon signal a shift towards cutting interest rates. This positive momentum followed a strong session on Wall Street, where the S&P 500 recorded its eighth consecutive day of gains.
MSCI’s all-country world index was on track for its ninth straight day of increases, marking its longest winning streak since December. In Asia, stocks advanced in Japan, South Korea, and Australia, while shares in China experienced a slight dip. European markets followed suit, with the Euro Stoxx 50 rising, and U.S. futures also showed gains. Meanwhile, U.S. Treasury 10-year yields remained steady amid the broader market rally.
The buoyant mood in global equities was largely driven by expectations of an imminent easing of monetary policy by the Federal Reserve. Investors are increasingly betting that the Fed will cut interest rates as early as September, which has helped to sustain robust equity allocations despite recent market volatility and ongoing economic uncertainties.
The MSCI Asia Pacific Index, reflecting the regional market sentiment, has seen gains in all but two sessions since August 6, reinforcing the belief that U.S. policymakers are likely to adopt a more accommodative stance soon. Additionally, a gauge of Asian currencies touched its highest level since January, signaling broad optimism across the region’s financial markets.
In the commodities market, oil prices extended their biggest drop in two weeks after the U.S. announced that Israel had accepted a cease-fire proposal in Gaza, further contributing to the optimistic tone in global markets.
As investors brace for potential shifts in U.S. monetary policy, the rally in global stocks underscores a growing confidence that central banks may soon pivot towards more supportive measures, providing a continued boost to markets worldwide.
