Global stock markets surged on Friday, heading for a fourth straight month of gains, driven by positive U.S. growth data that ended a weeks-long decline in the dollar and kept bond markets volatile.
MSCI’s world share index rose by 0.2%, contributing to a 1.8% monthly gain, while Europe’s Stoxx index reached a record intraday high, and Britain’s FTSE 100 hit a three-month peak.
U.S. stock futures also pointed to further gains, with Nasdaq and S&P 500 futures rising 0.7% and 0.4%, respectively.
The market’s recovery from early August’s steep sell-off was fueled by hopes that the U.S. economy could maintain steady growth without hindering potential interest rate cuts.
Traders are increasingly confident that the Federal Reserve will implement a 25 basis point rate cut in September, with a possibility of a larger 50 basis point reduction.
Strong consumer spending and corporate profits contributed to the U.S. economy’s better-than-expected performance in Q2 2024, further bolstering market optimism.
Meanwhile, the dollar stabilized near a one-week high against major currencies, poised to break a five-week losing streak.
However, the yen showed resilience, reducing the dollar’s gains for the month. Bond yields remained low despite strong economic data, with the 10-year U.S. Treasury yield at 3.9%.
Investors remain cautious, with market sentiment likely to fluctuate based on upcoming economic data.