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

(Bloomberg) — Global stocks rose Thursday, lifted by data showing cooling US core inflation and a slew of robust corporate earnings. 

Europe’s Stoxx 600 climbed for a third day, with luxury goods maker Richemont soaring 18% after it reported a jump in jewelry sales. Its results lifted an index of European luxury stocks by the most since March 2022. Tech stocks also outperformed, with ASML Holding NV up as much as 4.9%, as a strong outlook from Taiwan Semiconductor Manufacturing Co. fueled hopes of resilient spending on artificial intelligence. 

Futures contracts for the Nasdaq 100 were up 0.5%, supported by the upbeat report from TSMC, the main chipmaker to Apple Inc. and Nvidia Corp. S&P 500 futures rose 0.3%, after the benchmark’s 1.8% rally on Wednesday, its best day since the November election. Tech shares, including Nvidia and Super Micro Computer Inc., rose in premarket trade.

The gains come after a US core inflation reading came in at 0.2%, marking the first step down in six months. Ten-year Treasury yields, which slid 10 basis points after the data, held steady on Thursday as traders fully priced a Fed rate reduction by July, reinstating bets that had been dashed by stronger-than-expected December jobs numbers. 

The inflation print has helped calm investor fears that the US economy could run too hot, keeping inflation and Treasury yields higher for longer, and possibly forcing the Fed to reverse course on rate cuts. 

“Markets had been hit by a ‘Goldilocks-is-gone’ narrative for about a month, but it seems the US inflation data has set us back on course,” said Francois Rimeu, a strategist at Credit Mutuel Asset Management in Paris.

Rimeu sees no real reason for market sentiment to be derailed, noting “global and US growth are holding, the euro zone is sluggish but growing, fiscal stimulus policies are broadly unchallenged and the upcoming earnings season is looking OK.”

Even so, the renewed appetite for risk will be tested in coming days, as the Fed and the Bank of Japan hand down policy decisions, and President-elect Donald Trump takes office. US initial jobless claims and retail sales figures due later Thursday will provide a broader picture of the health of the economy, with economists forecasting retail sales to have slowed slightly last month.

“What we want to see is pretty much a Goldilocks scenario of decent growth in the US but no strong re-acceleration,” said Amelie Derambure, a portfolio manager at Amundi Asset Management. “What we don’t want is something too crazy on the retail sales that would put pressure on the Fed.”

Investors are also watching the US earnings season unfold, with reports due from Bank of America Corp. and Morgan Stanley, after JPMorgan Chase & Co., Goldman Sachs Group Inc. and others posted blockbuster earnings on Wednesday. 

In currency markets, Bloomberg’s dollar index edged higher, halting a two-day losing streak. The latest lackluster growth data from Britain underscored the divergence between the US economy and its peers in the developed world, knocking the pound lower against the greenback. The yen firmed, however, on a report that BOJ officials see a good chance of a rate increase next week.

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

• S&P 500 futures rose 0.3% as of 6:24 a.m. New York time
• Nasdaq 100 futures rose 0.4%
• Futures on the Dow Jones Industrial Average fell 0.1%
• The Stoxx Europe 600 rose 0.7%
• The MSCI World Index rose 0.1%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro was little changed at $1.0286
• The British pound fell 0.3% to $1.2204
• The Japanese yen rose 0.5% to 155.76 per dollar

Cryptocurrencies

• Bitcoin fell 0.9% to $98,810.45
• Ether fell 2.9% to $3,332.01

Bonds

• The yield on 10-year Treasuries was little changed at 4.66%
• Germany’s 10-year yield was little changed at 2.57%
• Britain’s 10-year yield declined two basis points to 4.71%

Commodities

• West Texas Intermediate crude fell 0.7% to $79.51 a barrel
• Spot gold rose 0.5% to $2,709.21 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu and Chiranjivi Chakraborty.

©2025 Bloomberg L.P.