Global Markets Surge on Fed Rate Cut Expectations

Global shares rose as U.S. economic data pointed to a Federal Reserve rate cut. Wall Street posted gains, led by tech and consumer stocks, while utilities and healthcare saw losses. The Japanese yen strengthened amid bond sell-offs. Copper hit record highs, boosting commodities.

Global shares experienced a lift on Friday as pivotal U.S. economic data reinforced investor expectation of a Federal Reserve rate cut next week. The anticipated monetary easing weighed down the dollar while miners' yellow metal, gold, surged. Wall Street's major indexes secured another week of gains, primarily driven by the communications, consumer discretionary, and technology sectors. However, the utility, energy, and healthcare stocks encountered downturns.

The Dow Jones Industrial Average recorded a 0.22% increase, meanwhile, the S&P 500 and Nasdaq Composite added 0.19% and 0.31% respectively. European markets ended with modest advancement, achieving a 0.41% escalation for the week. Simultaneously, MSCI's global stocks index notched up 0.06%, sustaining a positive streak for the second consecutive session.

The prospect of the Fed cutting interest rates by 25 basis points at its upcoming policy meeting bolstered market sentiment. With a near 90% probability priced in by CME's FedWatch tool, investors favorably interpreted the central bank's stance. Meanwhile, in the debt markets, Japanese government bonds led a global sell-off, and the yen's appreciation foreshadowed a rate hike by the Bank of Japan, causing ripples in currency and carry trade dynamics.

(With inputs from agencies.)