Global Markets Navigate Political Turbulence with Optimism

Global stocks and bonds regained stability despite political upheavals in France, Japan, and the U.S. Optimism over potential U.S. interest rate cuts and AI-related growth sustained market enthusiasm. However, currency volatility persists, particularly with the yen under pressure due to Japan's political shifts.

Global stocks and bonds managed to regain stability on Tuesday amidst political upheavals in France, Japan, and the U.S. While investor optimism over possible U.S. interest rate cuts provided a boost, the euro slumped for a second consecutive day. French political turmoil added to the market tensions.

The situation in Japan eased slightly as investors showed confidence, snapping up government debt following Sanae Takaichi's election as ruling party leader. Meanwhile, the U.S. government shutdown continued unabated, creating further unease in the global markets.

Despite political noise, market fundamentals remain strong, with the prospect of U.S. Federal Reserve rate cuts and an AI-driven demand surge. However, the yen faces pressure as fiscal expansion towers over monetary tightening. In Europe, the STOXX 600 showed modest gains, while geopolitical tensions remain a concern.

(With inputs from agencies.)