Stocks Rise on Fed Rate-Cut Bets, Earnings Boost: Markets Wrap

(Bloomberg) — Global stocks rose as cooling US core inflation kept alive the prospect of Federal Reserve easing this year and positive earnings news boosted sentiment.

Europe’s Stoxx 600 climbed as luxury giant Richemont soared 15% after reporting a jump in jewelry sales. The region’s tech stocks outperformed after Taiwan Semiconductor Manufacturing Co.’s strong outlook fueled hopes of resilient AI spending. 

Futures contracts for the tech-heavy Nasdaq 100 were 0.6% higher, supported by the upbeat news from TSMC, the main chipmaker to Apple Inc. and Nvidia Corp. S&P 500 futures rose, signaling further gains on Wall Street after the benchmark rallied 1.8% following Wednesday’s inflation data, the market’s best day since the November election.  

The pound was weaker after UK economic growth for November missed forecasts. An index of the dollar halted a two-day losing streak, while Treasuries were little changed after the benign US inflation data spurred their best day in months. 

In Asia, gauges in Australia, Hong Kong and South Korea all advanced, sending an index of Asian equities higher for a third day. The yen rose as much as 0.8% against the greenback on a report that BOJ officials see a good chance of a rate increase next week as long as Donald Trump’s arrival at the White House doesn’t trigger too many negative surprises. 

“Risk appetite across the region has improved off the back of the US inflation data,” said Jun Rong Yeap, market strategist at IG Asia Pte. “While US policymakers will still want to see more progress toward their inflation target before considering another rate cut, the data has helped to shift the timeline for the next rate cut forward.” 

Swap traders are back to fully pricing in a Fed rate reduction by July following the US inflation report, reinstating bets that were dashed when December jobs data came in stronger than expected. But the renewed appetite for risk will be tested in the coming days as the Fed and the Bank of Japan hand down policy decisions and Trump takes office.

Later Thursday, the European Central Bank will release its meeting minutes while US data to be published includes initial jobless claims and retail sales, providing investors with a broader picture of the health of the world’s largest economy.

Wednesday’s inflation data out of the US showed that the so-called core consumer price index — which excludes food and energy costs — increased 0.2% in December. That marked the first stepdown in the rate in six months. From a year ago, it rose 3.2%. That’s still above the Fed’s 2% target.

A handful of Federal Reserve officials said the data offered confidence that inflation would continue to ebb. “The process of disinflation remains in train. But we are still not at our 2% goal, and it will take more time until we can achieve that on a sustained basis,” New York Fed President John Williams said Wednesday.

In commodities, oil held a powerful, early-year advance on mounting concerns about risks to global supplies, and as commercial crude inventories in the US posted their longest run of declines since 2021.

 

Key events this week:

• ECB releases account of December policy meeting, Thursday
• Bank of America, Morgan Stanley earnings, Thursday
• US initial jobless claims, retail sales, import prices, Thursday
• China GDP, property prices, retail sales, industrial production, Friday
• Eurozone CPI, Friday
• US housing starts, industrial production, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.8% as of 8:08 a.m. London time
• S&P 500 futures rose 0.4%
• Nasdaq 100 futures rose 0.6%
• Futures on the Dow Jones Industrial Average rose 0.2%
• The MSCI Asia Pacific Index rose 1%
• The MSCI Emerging Markets Index rose 1.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.0296
• The Japanese yen rose 0.3% to 156.02 per dollar
• The offshore yuan was little changed at 7.3470 per dollar
• The British pound fell 0.2% to $1.2215

Cryptocurrencies

• Bitcoin was little changed at $99,753.48
• Ether fell 1.4% to $3,383.42

Bonds

• The yield on 10-year Treasuries was little changed at 4.66%
• Germany’s 10-year yield was little changed at 2.56%
• Britain’s 10-year yield declined one basis point to 4.72%

Commodities

• Brent crude rose 0.2% to $82.16 a barrel
• Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu, Richard Henderson and Garfield Reynolds.

©2025 Bloomberg L.P.