Global Markets Rally Amid Reassessed Rate Hike Expectations
Global stocks and bonds rallied on Thursday as investors reassessed their expectations for Federal Reserve interest rate hikes. The rally came despite ongoing concerns about geopolitical risks, particularly between the US and Iran.
The STOXX 600 index in Europe rose 0.2%, snapping a three-day losing streak, while US stock futures gained around 0.1%. However, Broadcom shares fell nearly 2% after the chipmaker issued a revenue forecast that missed market expectations.
Investors are closely watching Friday's US nonfarm payrolls report for clues on the labor market and potential Fed policy decisions. Money markets currently price in a roughly 60% probability of a rate hike this month, up from less than 40% a week earlier.
Fed Governor Christopher Waller is scheduled to speak on Friday, following comments from New York Fed President John Williams that rising long-term Treasury yields reflect a solid economy rather than heightened inflation concerns. However, Williams emphasized the need for caution in interpreting these signals.