Global stocks rally on rising chances of fed rate cut; dollar steady

Global stock markets gained on Tuesday as expectations for a U.S. Federal Reserve interest rate cut in December grew, driving investors into technology shares despite concerns about sector overheating.

Alphabet, Google’s parent company, surged in premarket trading, pushing closer to a $4 trillion market value, reflecting optimism around the AI-driven tech boom, News.Az reports, citing Reuters.

The MSCI All-World Index rose for a third consecutive day, recovering from last week’s two-month lows. European stocks edged up 0.2%, while U.S. stock futures hovered near unchanged after Monday’s rally.

Treasury yields fell slightly, with the 10-year benchmark at 4.03% and two-year yields steady at 3.49%. Market expectations for a December quarter-point cut have jumped to 81%, up from 42.4% last week, following comments from Fed Governor Christopher Waller and New York Fed President John Williams. The Fed meets on December 9-10.

Despite the shift in rate expectations boosting equities, the dollar remained mostly steady. It gained 1.6% in November against most major currencies, except the offshore Chinese yuan. The Japanese yen hovered near a 10-month low, raising concerns in Tokyo over potential intervention.

Tensions also linger over Japan-China relations after Japanese Prime Minister Sanae Takaichi indicated a potential military response if China attacked Taiwan. Takaichi discussed the matter with U.S. President Donald Trump, who briefed her on his call with Chinese President Xi Jinping.

Brent crude fell 0.4% to $63.14 a barrel; gold slipped 0.1% to $4,135 an ounce but is set for a near 3% monthly gain. Alphabet shares rose 4% premarket after reports that Meta may use Alphabet’s AI chips in its data centers from 2027 and rent them next year.