Global Markets Boosted by Fed Rate-Cut Hopes; U.S. Markets Closed for Thanksgiving

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Global markets rose on increased hopes of a Federal Reserve rate cut next month, and as investor optimism over artificial intelligence returns. U.S. markets are closed Thursday for the Thanksgiving holiday and are open for a shortened session Friday.

—U.S. Futures for the Dow Jones Industrial Index and S&P were up 0.05% and 0.06%, respectively, while the tech-heavy Nasdaq was up 0.09% ahead of the market reopen Friday. All indexes closed higher Wednesday for the fourth session in a row, boosted by Microsoft, CoreWeave and Dell.

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—Asian indexes closed mostly higher, with Japan and South Korea seeing steady gains led by technology stocks. The Nikkei closed 1.2% higher, and the Kospi added 0.7%. However, indexes in China were mixed due to some profit-taking setting in on tech stocks. The ChiNext and Shenzhen closed 0.4% and 0.1% lower. The Shanghai composite index is 0.3% higher, while Hong Kong’s Hang Seng is trading flat.

—In Europe Germany’s DAX was up 0.4%, France’s CAC 40 rose 0.2% and London’s premier FTSE 100 index was up 0.1%. The Stoxx 600 index was up 0.15%. Sportswear-maker Puma was leading the risers—up 13%—on a report that China’s sports apparel company Anta Sports was among those exploring a potential takeover of the German company.

—The dollar traded steady but remains near a one-week low reached overnight on increased bets that the Federal Reserve will cut interest rates further. Recent comments from Fed policymakers, including John Williams, Mary Daly and Christopher Waller, confirmed expectations for another rate cut in December. With the U.S. Treasury and stocks markets closed Thursday for Thanksgiving, liquidity will be thinner into the weekend, with the dollar potentially stabilizing after this week’s falls, ING’s Francesco Pesole says in a note. The DXY dollar index trades flat at 99.615, near the overnight low of 99.406.

—Yields on U.K. government bonds were little changed in early trade as investors digest the fiscal measures outline in Wednesday’s budget announcement. Gilt yields fell following the budget statement and news that the fiscal headroom had doubled to 22 billion pounds from nine billion pounds at the previous statement in March. The 10-year gilt yields edged up 0.4 basis points to 4.427%, Tradeweb data show.

—Sterling hovered close to a four-week high against the dollar and euro as investors continue to express relief that Wednesday’s U.K. budget delivered no major surprises. U.K. Treasury chief Rachel Reeves announced a series of tax rises to fix the public finances, as widely expected. Sterling traded flat at $1.3238, close to a high of $1.3268 reached earlier. The euro traded flat at 0.8750 pounds, near an earlier low of 0.8741

—Eurozone government bond yields were marginally lower in opening trade. The 10-year Bund yield fell 0.8 basis points to 2.667%, while the 10-year French OAT yield was 0.5 basis points lower at 3.394%, according to Tradeweb.

—The 10-year Treasury yield closed at 3.991% on Wednesday, according to Tradeweb. Trading in U.S. Treasurys is closed on Thursday due to the Thanksgiving holiday.

—Oil prices were steady as traders take stock of developments to end the Russia-Ukraine war. Brent crude and WTI were both down 0.1% to $62.46 and $58.59 a barrel, respectively. U.S. envoy Steve Witkoff will hold talks in Russia next week, while Ukraine said good foundations have been laid toward reaching an agreement.

—Gold prices were steady but remain elevated on strengthening bets that the U.S. Federal Reserve will cut rates in December, MUFG’s Soojin Kim writes. Futures in New York were down 0.1% at $4,196.20 a troy ounce.

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