Global stocks extend rally on Fed rate cut hopes
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The news: Global stocks pushed higher on Wednesday on growing expectations that the US Federal Reserve will cut interest rates at its upcoming September meeting.
The numbers: The S&P 500 was on track to build on Tuesday’s record close, as futures for the benchmark climbed 0.2% before US market open on Wednesday. Dow E-minis were also up 104 points, or 0.23%, while Nasdaq 100 E-minis were up 54.25 points, or 0.23%.
The CBOE volatility index dropped to 14.55, its lowest reading since January.
Japan’s benchmark Topix rose 0.8% to an all-time high, and Taiwan’s Taiex closed just short of a new record. South Korea’s Kospi closed up 1.1%.
Europe’s Stoxx 600 rose 0.4% in Wednesday morning's trading session.
The context: The global rally followed data released on Tuesday that showed US inflation held steady at 2.7% in July, confounding expectations that Trump’s tariffs would pus consumer prices higher.
Investors read the figures as a signal that the Fed’s final remaining obstacle to cutting interest rates had been removed, with future markets pricing in a 96% chance of a 25 percentage point cut in September.
