Unexpectedly powerful economic data from the United States has sent a jolt of optimism through global financial markets.
On Tuesday, fresh reports revealed that the American economy did not just grow; it surged. The US posted an annualized expansion of 4.3% for the third quarter.
This figure completely overshadowed the 3.3% projected by analysts.
Rate Cut Hopes Diminish
The driving force behind this surge is resilient consumer spending. Consequently, the narrative regarding the Federal Reserve is shifting rapidly.
Investors are actively recalibrating their expectations for January. With the economy running hot, the likelihood of a rate cut has plummeted. Instead, the consensus is moving toward the Fed holding interest rates steady to prevent overheating.
Bond markets reacted immediately to this realization. The 10-year Treasury yield climbed to 4.198%, signaling that traders expect borrowing costs to remain higher for longer.
Equities Ride the Wave
Despite the prospect of sticky interest rates, equity markets embraced the growth narrative.
Wall Street witnessed a broad, albeit measured, upward march:
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Dow Jones Industrial Average: Added 44 points (48,406.82).
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S&P 500: Climbed to 6,884.37.
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Nasdaq Composite: Finished in the green at 23,435.22.
The momentum was not confined to North America. The MSCI World Index tacked on 0.23%, reflecting a synchronized global upswing.
Healthcare Innovation Lifts Europe
Across the Atlantic, the STOXX 600 briefly touched a record high. While US economic growth provided the backdrop, a major regulatory victory in the healthcare sector provided the fuel.
Novo Nordisk, the Danish pharmaceutical titan, secured a pivotal win. The U.S. Food and Drug Administration (FDA) has officially approved the company’s new weight-loss medication in pill form.
This is a game-changer for the obesity treatment market.
Investors rallied around the stock, recognizing that a shift from injections to oral tablets significantly lowers barriers for patients. This approval positions Novo Nordisk to capture a larger slice of the lucrative global sector.
Precious Metals Shatter Records
While stocks climbed, commodities staged a historic rally of their own.
Investors are hedging their bets, driving precious metals into uncharted territory. Gold smashed through the ceiling, trading above $4,500 per ounce.
Meanwhile, silver achieved a landmark moment, crossing the $70 per ounce threshold for the first time in history. Market watchers attribute this frenzy to a dual engine: robust industrial demand coupled with the traditional safety of hard assets.
Currencies in Flux
The foreign exchange markets were equally volatile.
The Japanese yen strengthened by 0.55% to trade at 156.21 against the dollar. Traders are on high alert, suspecting that the Japanese government is poised to intervene to prop up the currency.
Conversely, the broader Dollar Index slipped 0.19% to sit at 98.05, while the Euro managed a 0.12% gain, trading at 1.1775.
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