The DJIA increased 322.37 points, or 0.85%, to 38,225.66, the S&P 500 added 45.81 points, or 0.91%, to 5,064.20, the Nasdaq Composite advanced 235.48 points, or 1.51%, to 15,840.96, MSCI’s gauge of stocks across the globe gained 7.17 points, or 0.95%, to 761.44
A gauge of global stocks jumped on Thursday after the Federal Reserve hinted it was leaning toward a dovish stance, while the dollar pulled back against the yen after another suspected round of intervention by the Bank of Japan.
On Wall Street, U.S. stocks ended with solid gains, after Fed Chair Jerome Powell said that while recent inflation readings mean it will likely take longer than expected for central bank officials to become comfortable that inflation will resume its decline, interest rate hikes also remained unlikely.
Markets have consistently pared back the timing and amount of rate cuts this year from the Federal Reserve as inflation has proved to be sticky and the labour market remains on solid footing. After expecting the first cut to come by March at the start of the year, markets now see a more than 60% probability the Fed will cut by at least 25 bps in September, as per CME’s FedWatch Tool.
The U.S. central bank also said it would slow the speed of its balance sheet drawdown starting on June 1 to ensure this process does not create undue stress in financial markets.
U.S. economic data also showed the labour market remains tight, ahead of key government payrolls data due on Friday, while other data suggested worker productivity was subdued in the first quarter.
He is not intending to put a hike back on the table and the market has already kind of absorbed the idea that it is going to be higher for longer, the key is how much higher for longer and that is tomorrow’s report, according to Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.
He added: Jobless claims at 208,000 today help affirm that, but the labour market report tomorrow will be the big one and affirm the Fed’s view of how strong is strong.
Of the 373 firms in the S&P 500 that reported earnings through Thursday morning, 77.2% have topped analyst expectations, as per LSEG data, above the 67% beat rate since 1994 but marginally below the 79% over the past four quarters.
The DJIA increased 322.37 points, or 0.85%, to 38,225.66; the S&P 500 added 45.81 points, or 0.91%, to 5,064.20; and the Nasdaq Composite advanced 235.48 points, or 1.51%, to 15,840.96.
MSCI’s gauge of stocks across the globe gained 7.17 points, or 0.95%, to 761.44, on pace for its biggest daily percentage gain since April 23, while Europe’s broad FTSEurofirst 300 index closed down 4.50 points, or 0.23%.
Shares in Europe closed marginally down after hitting a one-week low earlier in the session, as investors returned from a holiday and digested the Fed’s announcement and a slew of earnings reports.
