New York: Asian and global financial markets experienced a significant upswing on Thursday, driven by optimism over potential U.S. Federal Reserve interest rate cuts and a sharp rally in technology stocks. Investors reacted positively to recent economic data indicating a weaker-than-expected U.S. labor market, fueling speculation that the Fed may reduce rates to support economic growth.
In the United States, a disappointing labor report for September revealed unexpected job losses, coupled with downward revisions to August’s figures. This data reinforced expectations of monetary easing, prompting global investors to move into riskier assets such as equities, while also seeking safe-haven investments. The Philadelphia Semiconductor Index surged over 2%, reflecting renewed enthusiasm in technology shares, particularly in the artificial intelligence and semiconductor sectors.
Asian markets mirrored this upbeat sentiment. Japan’s Nikkei 225 climbed 0.5%, Taiwan’s TWSE jumped 1.5%, and South Korea’s KOSPI soared 2.8%, largely propelled by announcements of new AI chip partnerships and strong corporate earnings forecasts. Hong Kong’s Hang Seng Index also posted modest gains of 0.5%, as investors remained focused on broader global market trends rather than the temporary U.S. government shutdown, which paused the release of some key economic indicators.
Safe-haven assets, particularly gold, saw record highs amid ongoing uncertainty. Gold prices surged to $3,895 per ounce as investors hedged against potential volatility from geopolitical tensions and the U.S. fiscal environment. The U.S. dollar weakened, with the dollar index falling to a one-week low of 97.459, while the euro and British pound gained modestly. U.S. Treasury yields also declined, with the two-year yield reaching a two-week low of 3.531%.
Oil markets showed a moderate rebound, with Brent crude rising to $65.50 per barrel and West Texas Intermediate (WTI) to $61.92. Analysts attributed the gains to concerns over tighter sanctions on Russian crude, which could reduce global supply and support oil prices in the near term.
Market experts noted that while the U.S. government shutdown introduces temporary uncertainty, its historical impact on financial markets has been limited. The primary focus remains on the Federal Reserve’s monetary policy trajectory and labor market trends. Investors are expected to closely monitor upcoming economic data releases and geopolitical developments, which could influence the direction of global equities and commodities in the coming weeks.
SPDR S&P 500 ETF Trust (SPY) reflected this positive momentum, trading at $668.45 with intraday highs reaching $669.37 and lows at $660.95, underscoring investor optimism in U.S. equities despite the temporary halt in government operations.