Rising Wall Street Trends Propel Global Markets: Anticipation Builds for Crucial Inflation Update

• World stocks are mostly higher following a Wall Street rally that led to a record high for the Nasdaq composite index.
• Concerns about inflation persist as the producer price index reading for April reached 0.5%, higher than forecast.
• Fed Chair Jerome Powell reassured investors that the U.S. central bank won’t likely raise its key interest rate to respond to stubborn inflation.

Global stocks rise following Wall Street rally, despite persistent inflation concerns. Investors reassured by Fed Chair’s comments on interest rates.

Global Stocks Rise Following Wall Street Rally

World stocks were mostly higher on Wednesday after a rally on Wall Street that took the Nasdaq composite index to a record high. A report Tuesday showed that prices remain stubbornly high at the wholesale level in the United States, before many price changes are passed along to consumers, with the producer price index reading for April reaching 0.5%, higher than forecast. The rate of inflation has been ticking higher in 2024, raising concerns that the Federal Reserve could have a hard time taming inflation to its goal of 2%.

Fed Chair Reassures Investors

Investors were reassured by comments made by Fed Chair Jerome Powell. Speaking at a panel discussion in Amsterdam on Tuesday, he reaffirmed that the U.S. central bank won’t likely raise its key interest rate to respond to stubborn inflation. But he also said that his confidence that inflation will ease is “not as high as it was” because price increases have been persistently hot in the first three months of this year.

European and Asian Market Response

In the European market, Britain’s FTSE 100 rose 0.5% and hit another record high to 8,747.41 in early trading. Germany’s DAX was up 0.2% to 18,755.96 and the CAC 40 in Paris edged 0.1% higher to 8,229.78. In Asian trading, Tokyo’s Nikkei 225 index climbed 0.1% to 38,385.73 and Australia’s S&P/ASX 200 advanced 0.4% to 7,753.70. The Shanghai Composite index slipped 0.8% to 3,119.90 after the central bank kept a key lending rate unchanged Wednesday, signaling Beijing’s focus on maintaining monetary stability.

Conclusion

Despite persistent concerns about inflation, global stocks are on the rise following a Wall Street rally. Investors have been reassured by comments from the Fed Chair, who stated that the central bank is unlikely to raise its key interest rate in response to stubborn inflation. This has led to positive responses in both European and Asian markets.