Global stocks mostly rise as Fed, Bank of England cut rates / Photo: © AFP/File
Global stocks mostly rise as Fed, Bank of England cut rates
Global stocks mostly rose Thursday, with US indices hitting fresh records as a Federal Reserve interest rate cut extended a post-election rally.
While the Dow finished flat, both the S&P 500 and Nasdaq jumped to new all-time highs as the Fed shrugged off concerns about the impact of Donald Trump's election victory and moved ahead with a quarter point interest rate cut.
The central bank voted unanimously to reduce interest rates by 25 basis points to between 4.50 and 4.75 percent.
Markets were cheered by Fed Chair Jerome Powell's tone, which kept the door open to further interest rate cuts.
"Of course, there's going to be a debate about the pace of rate cuts, but policy makers and chair Powell mentioned that they continue to think that policy is restrictive," said Angelo Kourkafas, senior investment strategist at Edward Jones.
All three major indices had hit all-time highs on Wednesday as markets greeted Trump's election win with the hope that tax cuts and the scaling back of regulation would offset the hit from higher tariffs.
Analysts have cautioned that aggressive growth-oriented policies could reignite inflation.
But Powell noted there was still uncertainty about what Trump's actual economic agenda would be.
"We don't guess, we don't speculate, and we don't assume," he said at a news conference.
Large tech companies were big winners, with Apple, Google parent Alphabet and Facebook parent Meta all up more than two percent.
But banking shares pulled back after a torrid session on Wednesday. Bank of America dropped 1.4 percent, while JPMorgan Chase fell 4.3 percent.
Earlier, the Bank of England announced a widely expected 25-basis-point cut, its second reduction since August, as inflation in Britain fell below its target rate.
Sweden's central bank also dropped borrowing costs by 50 basis points, its biggest reduction in a decade, while Norway made no change.
Frankfurt stocks rose by 1.7 percent as the conservative opposition heaped pressure on German Chancellor Olaf Scholz's crisis-hit government to allow for speedy elections by calling a confidence vote next week rather than in 2025.
Christian Democrats chief Friedrich Merz made the demand after Scholz's three-party coalition imploded Wednesday over the 2025 budget and fiscal policy.
In Asia on Thursday, Chinese stocks rallied as investors brushed off concerns that China in particular would be the target of Trump's tariffs.
- Key figures around 2130 GMT -
New York - Dow: FLAT at 43,729.34 (close)
New York - S&P 500: UP 0.7 percent at 5,973.10 (close)
New York - Nasdaq Composite: UP 1.5 percent at 19,269.46 (close)
London - FTSE 100: DOWN 0.3 percent at 8,140.74 (close)
Paris - CAC 40: UP 0.8 percent at 7,425.60 (close)
Frankfurt - DAX: UP 1.7 percent at 19,362.52 (close)
Tokyo - Nikkei 225: DOWN 0.3 percent at 39,381.41 (close)
Hong Kong - Hang Seng Index: UP 2.0 percent at 20,953.34 (close)
Shanghai - Composite: UP 2.6 percent at 3,470.66 (close)
Euro/dollar: UP at $1.0801 from $1.0729 on Wednesday
Pound/dollar: UP at $1.2985 from $1.2879
Dollar/yen: DOWN at 152.92 yen from 154.63 yen
Euro/pound: DOWN at 83.18 pence from 83.31 pence
West Texas Intermediate: UP 0.9 percent at $72.36 per barrel
Brent North Sea Crude: UP 1.0 percent at $75.63 per barrel
burs-jmb/sst
(P.Tomczyk--DTZ)
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