Markets Soar on Fed Rate Cut Hopes and Global Trade Developments

Global equity markets hit record highs, driven by optimism for a U.S. Federal Reserve interest rate cut and bullish sentiment on Wall Street. Positive U.S. inflation data and a pause on import tariffs fueled the rally. Key stock indices and global markets advanced, while oil and dollar values fluctuated.

Global equity markets reached unprecedented highs on Wednesday as investor optimism surged in anticipation of a likely interest rate cut by the U.S. Federal Reserve. The MSCI All Country World Index and major U.S. indices, including the S&P 500 and Nasdaq, posted record figures, buoyed by favorable inflation data and eased trade tensions.

Healthcare, consumer discretionary, and financial stocks led gains, while European and Japanese markets also saw significant advances. The market's positive response was bolstered by U.S. inflation numbers that showed tariffs had yet to impact consumer prices, increasing the chances of a Fed rate cut next month.

Traders now predict a nearly certain rate cut decision by the Fed in September. Simultaneously, U.S. and global financial markets reacted to U.S. Treasury Secretary's comments, fluctuations in the dollar, and volatile crude oil prices ahead of geopolitical meetings, signaling an intricate dance of economic factors at play.

(With inputs from agencies.)