Global stocks gained on Tuesday as optimism over U.S. interest-rate cuts fueled strong demand for technology shares across leading markets.
The MSCI All-Country World Index advanced toward another record high, supported by gains in Asia, where Taiwan Semiconductor Manufacturing Co. and Alibaba Group Holding Ltd. drove benchmarks higher.
Stocks in South Korea, Taiwan, and Hong Kong gained, but Indonesia’s market declined following President Prabowo Subianto’s sudden removal of finance minister Sri Mulyani Indrawati.
U.S. futures rose on Tuesday after the S&P 500 hovered near record highs, while the Nasdaq hit a fresh peak on sustained tech demand.
Analysts noted that risk-on sentiment remains concentrated in the sector with traders positioning for sustained earnings growth amid an improving rate outlook.
According to Tim Waterer, chief market analyst at KCM Trade, technology continues to attract strong investor flows. “The Nasdaq’s record highlights the sector’s appeal, with similar momentum evident in Asian markets,” he stated.
Political Risk Pressures European and Asian Markets
Futures in Europe edged lower, weighed down by French political turmoil after Prime Minister Francois Bayrou lost a parliamentary confidence vote, forcing another government reshuffle. French bond futures retreated as markets awaited clarity on the new leadership.
Japan’s Nikkei 225 hit an intraday record before retreating later in the session. Market participants adjusted to Prime Minister Shigeru Ishiba’s resignation, which heightened expectations for fiscal stimulus.
Japanese government bonds firmed following Monday’s sharp decline, reflecting investor speculation over looser fiscal conditions.
Indonesia recorded the steepest regional losses, with the Jakarta Composite Index falling as much as 1.8% and the rupiah weakening against the dollar. Bank Indonesia said it would intervene to support the currency.
Analysts warned that the sudden removal of Indrawati, a figure widely respected by international investors, may undermine confidence in Southeast Asia’s largest economy.
U.S. Rate Cut Bets Drive Optimism
Market sentiment globally is being shaped by expectations that the Federal Reserve will cut rates as early as this month. Cooling labor market data has strengthened bets for at least three reductions in 2025.
The U.S. 10-year Treasury yield edged up to 4.05%, while the dollar softened and gold climbed to another record high.
Frederic Neumann, chief Asia economist at HSBC, said regional markets will continue to take cues from U.S. developments.
“For the next several days, Asia will be guided by American inflation data, which will clarify the Fed’s path and influence central banks across the region,” he noted.
Corporate and Commodity Market Updates
In corporate developments, Anglo American Plc is nearing a deal to acquire Canada’s Teck Resources Ltd., in what could be the biggest mining transaction in more than a decade. Separately, Novartis AG agreed to purchase Tourmaline Bio Inc. for $48 per share in cash.
Oil prices advanced for a second consecutive day as traders weighed Saudi Arabia’s recent price cuts against demand prospects. Iron ore extended its rally, heading for the highest close in over six months on expectations of renewed Chinese demand.
Global bond markets also remained buoyant. Bloomberg’s Global Aggregate Index, which tracks sovereign and corporate debt, has gained more than 20% since its 2022 trough as easing signals from the Fed boosted fixed-income assets.