Global equity markets experienced a robust upturn on Tuesday, largely driven by the dovish commentary provided by officials at both the Federal Reserve and the European Central Bank (ECB). This dovish sentiment led to a noticeable decline in bond yields, thereby propelling the MSCI’s global stock index upwards by 1.42%.
In the United States, key stock indices, such as the S&P 500 and the Dow Jones Industrial Average, surged in response to the shift in long-term US Treasury bond yields, hinting at a potential pause in short-term interest rate hikes. Significantly, the 10-year Treasury yield saw a decline. The dovish stance adopted by central banks also triggered rallies in euro zone bonds, as well as US treasuries, encompassing the 10-year and 2-year treasuries.
Europe, too, witnessed a sharp rebound in stock markets. The pan-European STOXX 600 index surged by 2%, and notable performances were observed in the UK’s FTSE 100 and Germany’s DAX. Similarly, Asian markets showed favorable results, with Japan’s Nikkei 225 and Australia’s S&P/ASX 200 index both posting gains. However, the Shanghai Composite in China declined by 0.7%.
Meanwhile, the global crude oil market experienced a minor dip, which can be attributed to escalating tensions between Israel and Hamas. As the Israeli military continued its intense airstrikes on Gaza, Hamas issued threats to execute captives for each targeted home. These geopolitical tensions left a notable imprint on market movements worldwide. Consequently, US crude oil prices registered a 0.81% drop, settling at $85.68 per barrel, while Brent crude oil prices decreased by 0.83%, closing at $87.42 per barrel.
