© Reuters.
NEW YORK – A wave of optimism has swept across global markets this week, with tech stocks at the forefront of a rally triggered by lower-than-expected US inflation figures. The easing inflationary pressures have raised investor hopes that the Federal Reserve may soon pause its aggressive interest rate hikes, a sentiment that reverberated through the financial world from Wall Street to Asia.
On Tuesday, the release of US inflation data that fell below market forecasts led to a significant dip in the 10-year US Treasury yields and sparked a robust rally across major indexes, particularly lifting technology shares. Investors, long wary of the Fed’s tightening monetary policy, saw this as a potential sign of a turning point in the central bank’s approach.
The positive ripple effects continued into Wednesday, with Asian markets experiencing notable gains. The led the charge, buoyed not only by the US inflation report but also by proactive measures from the Chinese government and the People’s Bank of China (PBoC) to stimulate economic activity. China’s retail sales and industrial production numbers surpassed expectations, showcasing the effectiveness of Beijing’s stimulus efforts.
Japan’s economy also came into focus as it reported a significant contraction, which many believe will lead to a continued ultra-loose monetary policy from the Bank of Japan. Meanwhile, in the United States, further signs of easing inflation emerged with falling retail sales and producer prices. This environment favored riskier assets and was particularly beneficial for tech stocks, which saw continued strength with slight gains in both the Index and , while the posted even larger increases.
Looking ahead to Thursday’s Asian session, modest gains from US tech stocks suggest a note of caution among investors. Economic indicators from Japan are set to be closely scrutinized alongside Australian employment figures, which could have implications for future Reserve Bank of Australia (RBA) policy decisions. Futures markets are currently indicating a negative start for both the and indices.
Investors around the world are now keenly awaiting further economic data and central bank cues to gauge whether this week’s market optimism will be a sustained trend or a temporary uplift in an otherwise challenging economic landscape.
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