Stocks rise as US inflation data still suggest rate cuts
European and US equity futures rose Monday as US inflation figures did little to alter views that the Federal Reserve will cut interest rates this year.
Benchmarks also gained in mainland China and South Korea, while Japanese equities fell after a report showed confidence among the country’s large manufacturers weakened slightly for the first time in four quarters. Elsewhere, gold jumped to a record price, adding impetus to a rally that’s also been driven by geopolitical tensions and robust Chinese demand.
Markets in Australia and Hong Kong were shut for a holiday.
China’s CSI 300 Index climbed as much as 1.8%, the most since Feb. 29, as a rebound in manufacturing activity reinforced hopes that the nation’s economic recovery may be starting to gain traction.
“Emerging optimism about China is real,” said Vishnu Varathan, chief economist for Asia ex-Japan at Mizuho Bank in Singapore. It may gain traction given “corresponding optimism elsewhere in Asia that dovetails with an upturn in global manufacturing,” he said.
Global equities have gained over 18% in the previous two quarters, driven by bets on interest-rate cuts and artificial intelligence stocks. Those themes will remain front and center of investor’s minds as markets head into the new period.
Treasury yields and a Bloomberg index of the dollar inched lower after Federal Reserve Chair Jerome Powell said Friday that the central bank’s preferred gauge of inflation was “pretty much in line with our expectations.” Powell added that it wouldn’t be appropriate to lower rates until officials are sure inflation is in check. Investors are betting the US central bank will make that first cut in June.
The core personal consumption expenditures price index — which excludes
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