· Stocks rallied on Thursday, led by strong gains in tech and energy shares, as Wall Street cheered the possibility that the Federal Reserve will cut interest rates next month.
The S&P 500 surged 1% to 2,954.18, a record close. The broad index also hit an intraday record of 2,958.06. The Dow Jones Industrial Average closed 249.17 points higher at 26,753.17. The Nasdaq Composite gained 0.8% to end the day at 8,051.34.
Market participants viewed the overall tone from the U.S. central bank as more dovish than expected. Traders are now pricing in a 100% chance of a rate cut next month, according to the CME FedWatch tool.
· European markets finished higher Thursday as investors reacted to interest rate decisions from the Bank of England and the Federal Reserve.
The pan-European Stoxx 600 closed up 0.5% provisionally, having hit its highest since May 6 earlier in the day.
· Stocks in Asia were higher on Thursday after the U.S. Federal Reserve left interest rates unchanged overnight but opened the door to rate cuts on the horizon.
Mainland Chinese shares surged on the day, with the Shanghai composite adding 2.38% to about 2,987.12 and the Shenzhen component 2.34% higher to 9,134.96, while the Shenzhen composite gained 1.954% to 1,556.60.
Hong Kong’s Hang Seng index rose 1.1% as shares of Chinese tech behemoth Tencent jumped 1.56%.
In Japan, the Nikkei 225 gained 0.6% to close at 21,462.86, with shares of index heavyweight Softbank Group soaring 2.59%, while the Topix advanced 0.3% to end its trading day at 1,559.90. The moves in Tokyo came as the Bank of Japan kept interest rates unchanged, emphasizing global risks were rising over issues such as the ongoing trade tensions.
“Downside risks regarding overseas economies are big, so we must carefully watch how they affect Japan’s corporate and household sentiment,” the Japanese central banks said in a statement announcing the policy decision.
· Stocks in Asia were subdued in Friday morning trade. Meanwhile, tensions in the Middle East continued to heat up.
In Japan, the Nikkei 225 was largely flat in early trade, while the Topix index slipped 0.26%.
Over in South Korea, the Kospi traded slightly lower as shares of LG Chem declined 0.85%. Australia’s S&P/ASX 200 also slipped fractionally, with shares of biotechnology firm CSL dropping more than 3%.
· “The key issue that we’re struggling with at the moment is the impact of geopolitics on business confidence,” James Sullivan, head of Asia ex-Japan equity research at J.P. Morgan told CNBC’s “Squawk Box” on Friday.
“No one knows what’s going on in the world at this point and it’s very difficult to have a (capital expenditure) budget in that type of environment. That’s the most significant drag on the global economy,” he said. “In terms of the drivers of oil going forward, yes you have potential geopolitical conflict pushing the price up. But core demand continues to be very weak and that’s really the driver of the story for us.”
Reference: CNBC
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