Investors adjusted their positions in the hopes that the latest easing of inflation would spur the Federal Reserve to lower the interest rate sooner than expected. Rate-cut expectations boosted the small-cap indexes, which soared as investors sold mega-cap tech stocks. The yen jumped 2% following rising expectations of a U.S. rate cut.
Benchmark indexes on Wall Street advanced to new highs, but indexes in Europe extended losses amid growing political uncertainties. Japan indexes closed at new highs, tracking gains in New York; China indexes turned lower ahead of inflation and trade balance reports; and India indexes touched new record highs.
U.S. investors look forward to the release of inflation reports this week. European markets may face headwinds after the changing political landscape in France and the U.K. In Asia, Japan struggles with the slow pace of corporate governance reforms, and China battles with a lack of domestic demand growth and a halting policy response.
U.S. major averages are set to extend weekly gains, and Treasury yields declined after the nonfarm payrolls for April and May were sharply revised down.
NVDA
NVDA
The S&P 500 index and the Nasdaq Composite advanced to new record highs after a batch of softer economic data strengthened the case of interest rate cuts later in the year. European bond yields advanced ahead of the UK parliamentary elections on Thursday. Market indexes in Japan and Hong Kong extended the recent rally.