Global stock markets saw declines this week due to inflation data from the U.S. and China, sparking hopes for a possible interest rate cut by the Federal Reserve, according to Afrinvest.

In the U.S., inflation for August rose by 0.2% month-on-month and 2.5% year-on-year, down from 2.9%.

This slower inflation rate has raised speculation that the Fed will lower interest rates, boosting investor confidence.

China’s inflation figures also indicate a cooling economy, adding to the positive market sentiment.

As a result, major U.S. indices, such as the S&P 500 and NASDAQ, increased by 3.8% and 5.7% respectively, reflecting investor optimism.

Afrinvest analysts believe a potential rate cut could inject more liquidity into global markets, supporting economic growth and driving bullish trends in stock markets worldwide.