London – Global markets rallied on hopes of U.S. interest rate cuts, particularly buoying Asian stocks, but sentiment cooled as the recent euphoria subsided, pulling U.S. share futures lower.
Asia spurred ahead on dovish Fed outlook
Markets across Asia, including Japan, South Korea, and Australia, advanced, driven largely by surging Chinese blue-chip stocks. Investors welcomed expectations of U.S. rate cuts, now priced in at around an 84 per cent probability for September and potential easing of up to 100 basis points by mid-2026.
Wall Street cools after earlier enthusiasm
While optimism had lifted futures, caution returned in pre-market trading. S&P 500 futures slipped by 0.2 per cent, and Nasdaq futures fell by 0.3 per cent, suggesting a softer open on Wall Street.
Inflation watch and Nvidia earnings loom large
Traders are evaluating upcoming U.S. personal consumption price data, expected to show core inflation nearing 2.9 per cent, a level last seen in late 2023. Alongside, the eagerly awaited Nvidia earnings report is anticipated to inject further volatility, given its expansive valuation and expectations of nearly 48 per cent year-on-year earnings growth.
Conclusion
Markets took a breather after earlier gains driven by dovish expectations around Federal Reserve policy. While Asian equities remain buoyant, global sentiment remains cautious ahead of inflation readings and the Nvidia earnings report. Investors seem to be recalibrating amid growing concerns over whether the stimulus optimism will sustain.