Global stocks rose on Thursday as U.S. rate cuts were still possible, the yen fell against all but the dollar, and gold remained near record highs. Industrial commodities like oil and copper reached five-month and 15-month highs, lifting basic materials and energy company shares.
These improvements were partly owing to supply disruptions and geopolitical tensions, but a resurgence in factory surveys (PMI), notably for China, suggests global growth optimism.
Federal Reserve Chair Jerome Powell reassured markets that U.S. rates would be cut this year, but the timing was data-dependent. S&P 500 and Nasdaq futures increased 0.3% and 0.4%, respectively, while the STOXX 600 (.STOXX) regional index rose in Europe.
After a price surge Wednesday, government bonds, which saw their worst daily selloffs in months, stabilized on Thursday. The U.S. services sector's index of prices paid fell to its lowest level since March 2020, offsetting a troubling rise in the manufacturing survey issued early this week, supporting easing.
Goldman Sachs raised its payroll prediction by 25,000 to 240,000 despite this series' weak link to Friday's payrolls report. Such a result would exceed the consensus expectation of 200,000 and could reduce the likelihood of a June rate cut.
The biggest change is how fast and far rates are predicted to decline, from over 140 basis points in January to 73 basis points this year. Investors also removed 100 basis points of easing from 2025, putting rates at 4% rather than 3%.
That huge change has left Treasuries underwater, with 10-year rates reaching 4.429% on Wednesday before falling to 4.367%. The dollar has surged across the board as investors have trimmed their predictions on how much and how quickly the Fed will lower rates this year, hurting the yen, which is at its weakest in over 35 years.
Gold hit a record $2,304 per ounce. Since February, momentum funds and commodity trading advisors have bought the price up 13%. Oil prices rose to their highest in five months amid rising global tensions and the potential of supply disruption if the Israel-Hamas war in Gaza expands to Iran.
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