LONDON: Global stocks rose by 1% on Tuesday as U.S. bond yields and the dollar eased from multi-month highs. Traders are closely watching the cabinet selections of President-elect Donald Trump while assessing the future of U.S. interest rates.
Tech stocks gained traction, reflecting Wall Street's recovery from last week's losses, though Nvidia's forthcoming earnings announcement limited significant movements.
The MSCI index, which measures world stocks, broke a four-day losing streak on Monday with a 0.35% increase, continuing its upward trend with a further 1% rise on Tuesday.
Market expectations for a quarter-point interest rate cut at the Federal Reserve's December meeting have decreased to below 59%, a slight drop from 62% the previous day.
Analysts view Trump's proposed fiscal spending, increased tariffs, and stricter immigration policies as inflationary, which could hinder potential Fed rate cuts amidst robust economic data.
While Trump has made appointments in health and defense, key financial roles such as Treasury Secretary and Trade Representative remain unfilled.
In Europe, the STOXX index rose 0.2% in early trading, following a 0.5% gain for Japan's Nikkei and a 0.8% increase in Australia’s equity benchmark, which hit a record intraday high. Taiwanese shares were up 1.3%.
Conversely, Chinese markets experienced declines, with mainland blue chips dropping 1.2% as investors weighed the potential impact of Trump's tariffs and awaited further stimulus details from Beijing.
U.S. S&P 500 futures indicated a 0.1% increase, following a 0.4% rise in the cash index overnight.
U.S. Treasury yields continued to decline, with the two-year yield at 4.2655% and the 10-year yield at 4.3844%, applying pressure on the dollar, which hovered near its overnight lows against major currencies.
The dollar index remained relatively stable at 106.23, close to Monday's low of 106.12, after reaching a yearly high of 107.07 last Thursday. The dollar fell 0.17% to 154.16 yen but gained slightly against the euro at $1.0586.
The yen was buoyed by remarks from Japanese Finance Minister Katsunobu Kato, who reiterated that the government would respond appropriately to excessive fluctuations in the yen's exchange rate.
Bitcoin, which reached a record high of $93,480 last week amid expectations for favorable cryptocurrency regulation under Trump, rose 0.37% to $91,688.
Gold prices increased by 0.28% to $2,619, following a nearly 2% jump on Monday, attributed to dollar weakness and rising tensions surrounding the Russia-Ukraine conflict.
Oil prices remained steady, with Brent crude futures down 0.2% to $73.14 per barrel, while U.S. West Texas Intermediate crude futures fell 0.27% to $68.97 per barrel, supported by the shutdown of Norway's Johan Sverdrup oilfield due to a power outage.