LONDON (AFP) – Major stock markets mainly rose yesterday as traders looked ahead to key US inflation data that could firm expectations for the Federal Reserve to start cutting interest rates in September.
Most leading Asian and European indices registered gains at the end of a volatile week for equities trading that saw tech stocks suffer a rout as earnings disappointed.
Elsewhere yesterday, the dollar traded mixed against main rivals and oil prices fell.
Positive performances by stock markets came despite more losses on Thursday on Wall Street’s Nasdaq.
“As traders draw their breath following a volatile week that saw wide swings across the equities and commodities space, we are left weighing up whether this is an opportunity or indicative of further downside to come,” noted Joshua Mahony, chief market analyst at Scope Markets.
All eyes later yesterday will be on the Fed’s preferred measure of US inflation – the personal consumption expenditures (PCE) price index.
“A stronger than expected reading… may threaten the prospect of a September rate cut from the Fed,” said Kathleen Brooks, research director at XTB.
“The Fed has remained faithfully data dependent, so if they do not see a good enough improvement in the June core PCE, then doubts might start to creep in about the potential for rate cuts this autumn.”
Figures on Thursday showing the US economy expanded far more than expected in the second quarter – and much quicker than the previous three months – provided a much-needed boost to sentiment and eased concerns that it was slowing a little too much for comfort.
The data was largely consumer-led, even while US interest rates remain at two-decade highs and inflation is elevated. In Asia yesterday, the Taipei stock market plunged more than three per cent as traders returned from their imposed typhoon break, with chip makers leading the losses.
Market titan TSMC dived more than five per cent, while ASE Technology plunged almost 10 per cent.
