Tech stocks saw strong gains in U.S. equity futures as investors eagerly await Federal Reserve Chair Jerome Powell’s speech, which is expected to provide insights into the future of interest rates. The Nasdaq 100 index rose by 0.7%, bolstered by robust earnings reports in the tech sector, while the S&P 500 also saw slight gains, inching closer to its 55th record high this year. At the same time, the U.S. dollar strengthened, and 10-year Treasury yields rose, signalling market optimism ahead of Powell’s comments.
Internationally, French markets remained steady in anticipation of a no-confidence vote that could potentially destabilise the government. Meanwhile, in South Korea, the won rebounded after President Yoon Suk Yeol reversed his unexpected martial law declaration, which had caused initial concerns about economic stability.
Powell’s upcoming speech, along with new U.S. data on services and manufacturing, is expected to influence market sentiment as investors prepare for a key labor market update on Friday. Mary Daly, President of the Federal Reserve Bank of San Francisco, stated that a rate cut in December is not guaranteed but remains a possibility. Analysts like Guy Miller, Chief Strategist at Zurich Insurance, suggest that Powell may signal a pause in rate changes to avoid surprising the market, though a 25 basis point reduction is still expected.
Strategists at Barclays Plc highlighted the impressive 27% rise in the S&P 500 this year, crediting the positive economic environment and significant political events, such as the election of Donald Trump, for fuelling market growth. Emmanuel Cau, team lead at Barclays, expressed confidence in the U.S. market’s continued strength through 2025, emphasising the notion of U.S. exceptionalism.
In Europe, France’s CAC 40 index showed modest gains, slightly outperforming the broader Stoxx 600 index. The euro dipped slightly as French bonds maintained a premium over German debt. Nannette Hechler-Fayd’herbe, Chief Investment Officer at Lombard Odier, reassured investors that France’s manageable current account deficit allows it to fund government debt internally, which contributes to stability in the market.
In South Korea, political uncertainty persists as the opposition Democratic Party seeks to impeach President Yoon after his martial law decree. The Bank of Korea responded by boosting short-term liquidity and managing currency markets to stabilise the economy. Charu Chanana, Chief Investment Strategist at Saxo Markets, indicated that swift government actions are expected to limit broader regional economic effects.
In commodities, oil prices stabilised after experiencing their largest gain in two weeks, while gold prices remained steady, supported by growing demand for safe-haven assets amid ongoing political unrest in both South Korea and France.
