Global Markets Show Resilience as MSCI’s Stock Index Recovers; Dollar Dips Ahead of Key U.S. Inflation Data


Global Markets Show Resilience as MSCI’s Stock Index Recovers; Dollar Dips Ahead of Key U.S. Inflation Data

New York (Reuters) – MSCI’s global stock index rebounded on Thursday, regaining ground lost in the previous session’s late sell-off. Simultaneously, oil prices faced a decline, and the dollar hit its lowest point in a week on the eve of a crucial U.S. inflation report.

Earlier in the week, oil prices had surged due to concerns about shipping disruptions in the Red Sea. However, they retreated after Angola’s announcement of its departure from the Organization of the Petroleum Exporting Countries (OPEC).

Wednesday witnessed Wall Street’s most substantial drop since September, with analysts attributing the decline to hedging activities linked to trading in short-dated options.

Quincy Krosby, Chief Global Strategist at LPL Financial (NASDAQ:LPLA) in Charlotte, NC, commented, “Today’s market is trying to recover. This has been the hallmark of the latest phase in the market.”

Positive investor sentiment was buoyed by Thursday’s data indicating that U.S. economic growth in the third quarter was not as robust as initially reported. Concerns about inflation were alleviated, with cracks emerging in the tight labor market, considered an obstacle to cooling inflation by the Federal Reserve.

Peter Tuz, President of Chase Investment Counsel in Charlottesville, Virginia, stated, “The fact that the third-quarter GDP number wasn’t revised upward… is giving investors comfort that the path the Fed is on… isn’t going change any time soon.”

Investors awaited Friday’s Personal Consumption Expenditure (PCE) index report, betting on confirmation of easing inflation. Krosby noted, “If expectations are for a faster decline in inflation than economists have forecast, perhaps you’d want to come in today rather than wait until tomorrow.”

Following Wednesday’s sell-off, caution prevailed among traders heading into the market close. Joe Mazzola, Director of Trading Services Education at Schwab, emphasized the significance of the S&P staying above Wednesday’s lows.

By the end of the trading day, all three U.S. indexes rallied, reaching session highs. The Dow Jones Industrial Average closed up 0.87%, the S&P 500 gained 1.03%, and the Nasdaq Composite added 1.26%.

While the pan-European STOXX 600 index initially closed down 0.21%, MSCI’s global stock index exhibited resilience, gaining 0.72%.

The U.S. dollar eased to its lowest point since Dec. 14 against a basket of currencies, awaiting U.S. inflation figures and signals on future Fed policy. The dollar index fell 0.605%, with the euro rising 0.59% to $1.1003.

In the commodities market, oil futures settled lower, influenced by Angola’s departure from OPEC, raising questions about the organization’s efforts to control global supplies.

Gold prices gained traction, with spot gold adding 0.7% to $2,044.30 an ounce, fueled by U.S. economic data that heightened expectations of a Federal Reserve interest rate cut in March next year. U.S. gold futures rose 0.49% to $2,044.50 an ounce.

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