U.S., European Markets Rebound on Dovish Fed Signal
Reversing the recent trend, U.S. and European market indicators rebounded as investors reacted to the US Federal Reserve’s dovish signal and easing geopolitical tensions.
Retreating Treasury yields supported global risk appetite after Federal Reserve Governor Christopher Waller indicated that further tightening would not be warranted if underlying inflation continued to ease.
The S&P 500 closed 1.06% higher, the NASDAQ gained 1.40%, and the Dow Jones ended the session up 1.18%, while investors now await August payrolls for guidance on labour market conditions and monetary policy.
Stabilising bond markets also helped Europe halt a three-session decline, with the Euro Stoxx 50 closing up 0.32% and the FTSE 100 gaining 0.70%, with stronger commodity prices providing additional support.
Against that backdrop, the technology rally is extending into Asia. The Hang Seng Index is trading 2.08% higher on reduced expectations of a September Fed rate increase, while the Nikkei 225 is up 1.27%.
The ASX 200 is flat, despite Wall Street’s advance and stronger domestic services activity. The Johannesburg Stock Exchange (JSE) is set for a firmer open this morning, extending the previous session’s gains as global futures edge higher and Asian markets are trading on the front foot.
Hong Kong’s technology rally is particularly constructive, with Tencent advancing 2.96%, providing a positive read-through for Naspers and Prosus.
The resources picture is marginally supportive, as the S&P/ASX 300 Metals and Mining Index climbed slightly by 0.03% so far. Gold is broadly steady, offering little impetus to gold miners, while weaker platinum and palladium prices point to pressure on PGM counters.
Local equities closed firmly higher on Thursday, with the All-Share Index gaining 1.40% to 116 688 points and the Top 40 advancing 1.44% to 109 277 points.
Resources led gains among the major sectors, rising 2.66%, supported by a stronger platinum-group metals pricing environment and elevated oil prices, as ongoing tensions between the US and Iran kept markets focused on potential supply disruptions through the Strait of Hormuz.
Industrials and Financials also traded higher, gaining 0.89% and 0.70%, respectively, contributing to a broad-based advance in the local market. Global Equities Markets Gain Momentum as Energy Costs Ease
