Stocks are on the rise, with markets hitting record highs globally. Traders are eagerly awaiting U.S. data that is expected to show a decrease in inflation, setting the stage for potential rate cuts in September. This news has sent the S&P 500 soaring to a sixth consecutive record closing high, with gains in technology shares driving the rally.
According to Shane Oliver, chief economist and head of investment strategy at AMP in Sydney, one of the main drivers behind this surge is the anticipation of interest rate cuts. Federal Reserve Chair Jerome Powell recently hinted at the possibility of rate cuts, with futures pricing indicating a high likelihood of a cut in September.
In Asia, Japan’s Nikkei rose to a record high, while MSCI’s broadest index of Asia-Pacific shares outside Japan also climbed to a two-year high. Taiwan stocks and Australia’s ASX 200 also reached record peaks.
While markets in China showed some momentum, ongoing concerns about tariffs and disappointing economic data have made sustained rallies challenging. Elsewhere, the euro and sterling saw slight gains, while the yen remained steady. Oil prices edged higher on the back of strong U.S. gasoline demand, and gold prices crept up slightly.
As investors await the U.S. CPI release, all eyes are on the upcoming U.S. earnings season, with companies like Delta Air Lines and PepsiCo set to report their results. Additionally, the Bank of Korea hinted at potential rate cuts, following a shift in tone at the Reserve Bank of New Zealand.
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