Global Markets Up After Powell Signals New Rate Cuts
By Dow Jones Newswires StaffGlobal stock markets and U.S. stock futures rose early on Wednesday following a mixed close on Wall Street in the prior session. A volatile session was marked by mixed rhetoric from the U.S. and China over trade, further signals from Federal Reserve Chair Jerome Powell that an interest rate cut is coming at its meeting later this month and strong earnings from major banks.Across other assets, the dollar fell, gold hit yet another record and French bond yield spreads tightened amid renewed optimism for a budget deal there.U.S. stock futures for the S&P 500 were up 0.4% after the index fell slightly at Tuesday's close. Futures for the Dow Jones Industrial Average climbed 0.3% and Nasdaq futures were up 0.5%.Asian shares closed mostly higher, with bargain hunting setting in from recent selling. Japan's Nikkei closed 1.8% higher, while South Korea's Kospi closed up 2.7%, snapping a two-session losing streak. Indexes in China also gained in line with most Asian peers. Government data showing that price pressure in China had eased slightly in September also helped sentiment. ChiNext was up 2.4%, while Shenzhen and Shanghai closed 1.6% and 1.2% higher, respectively. The Hang Seng index gained 2.1%.In Europe, the Stoxx Europe 600 was up 0.8% shortly after the market open. Shares in European luxury stocks rise in early trade after an increase in third-quarter sales at French group LVMH boosted hopes of a recovery in the sector. Its Paris-listed shares rose 12%, contributing to a 2.4% rise in the CAC 40. On the politics front, France's Prime Minister Sebastien Lecornu on Tuesday announced the suspension of contentious pension reform until the presidential elections in 2027, leading to greater optimism over the government's stability. Germany's DAX climbed 0.2%.The U.S. dollar fell to a nearly one-week low against a basket of currencies after Fed Chair Powell signaled further interest-rate cuts and as U.S.-China trade tensions simmer. President Trump on Tuesday threatened terminating some ties with China, including in relation to cooking oil, in retaliation for Beijing refusing to buy U.S. soybeans. The DXY dollar index against a basket of major currencies fell to a recent low of 98.774. Bitcoin, meanwhile, was last down 0.6% to $112,431.U.S. Treasury yields were marginally lower across maturities. The 10-year Treasury yield last traded down 0.7 basis point at 4.014%, while the 30-year Treasury yield was also down 0.7 basis point to 4.616%, according to Tradeweb data.Gold prices climbed above $4,200 a troy ounce, hitting a fresh record as the U.S.-China trade standoff and growing expectations of further interest-rate cuts boost demand for precious metals. In early trade, futures in New York rose 1.3% to $4,217.20 an ounce after reaching $4.218.20 earlier in the session, while spot gold was up 0.8% to $4,142.63. Silver futures gained 1.7% to $51.47 an ounce, driven by safe-haven demand and a massive liquidity squeeze in the London market.Oil prices extended losses from the previous trading session as fears of an impending supply glut and the trade tensions cloud crude's outlook. Brent was last down 0.3% to $62.20 a barrel.Write to Barcelona Editors at [email protected]