Central Banks Ramp Up Rate Hikes Amid Ongoing War-Driven Inflation Fears

Global equity markets edged higher on Friday, partly offsetting losses in Europe as central banks continued their fight against inflation. The S&P 500 and Nasdaq Composite finished higher after reversing early trade losses, while the Dow Jones Industrial Average fell 0.18%. Technology and industrials drove gains, while materials, utilities, and real estate stocks led declines.

The weekly performance saw the S&P 500 and Dow posting losses, while the Nasdaq posted a gain. MSCI's gauge of global stocks rose 0.07% but also posted a weekly loss. Central banks globally have been ramping up interest rates to combat inflation fears fueled by the ongoing war in the Middle East.

The Bank of Japan raised its key rate to a 31-year high of 1.25%, with two board members dissenting from the decision. The move weakened the yen and Japanese government bonds, with the currency falling 0.50% against the dollar to 156.76 per greenback.