Global equity markets picked up strong momentum following dovish comments from Federal Reserve officials and robust economic data, delivering broad support across asset classes. On Wall Street, the benchmark S&P 500 gained 1.06%, securing back-to-back daily gains for the first time in three weeks. The index moved within 1% of its all-time record high set last month, driven by widespread investor appetite.
Wall Street Rally Fueled by Tech Giants and Broad Participation
The US market advance was spearheaded by the Magnificent 7 tech mega-caps, which surged 2.38% to hit a three-month high and record their strongest single-day performance in a month. The rally demonstrated broad depth beyond the mega-cap space, as more than two-thirds of the S&P 500 constituents moved higher. This represented the largest single-day breadth of gainers for the index since early August. Meanwhile, equity futures for both US and European markets showed modest upward movement, trading up less than a tenth of a percent ahead of upcoming economic catalysts.
Asian Bourses Track Tech Sector Strength
Asian stock indices largely mirrored the tech-led gains from Wall Street during morning trade. Hong Kong's Hang Seng index surged 2.12%, while South Korea's KOSPI advanced 1.88% and Japan's Nikkei added 1.30%. Gains were more tempered across mainland Chinese exchanges, where the CSI 300 rose 0.43% and the Shanghai Composite edged up 0.35%. Bucking the regional trend, Australia's S&P/ASX 200 index slipped 0.21% amid localized market pressures.
Currency Markets: Yen Rebounds and Aussie Holds Multi-Month Highs
In foreign exchange markets, USD/JPY retested its August monthly swing low during Asian trading hours. Expectations of a hawkish policy adjustment by the Bank of Japan, combined with market speculation regarding official intervention, provided underlying support for the Japanese Yen. Concurrently, the US Dollar consolidated recent losses against major currencies, hindered by subdued US Treasury yields as traders anticipated employment updates. The AUD/USD pair maintained stability above 0.7200, lingering near its highest valuation since mid-May as the Reserve Bank of Australia's hawkish stance countered broad greenback weakness.
Gold Holds Near Highs While Bitcoin Sustains $80,000 Threshold
Precious metals saw minor consolidation, with gold trading below the $4,500 mark and snapping a two-day winning streak amid a brief US Dollar bounce. Nevertheless, gold prices remained within reach of their weekly highs. In digital assets, Bitcoin held comfortably above $80,000, sustaining risk-on market sentiment. Sentiment was bolstered by Federal Reserve Governor Christopher Waller signaling support for a potential rate pause, which brought market-implied probabilities of a September rate hike down to 50%. Among altcoins, Zcash (ZEC) and Ethena (ENA) led 24-hour gains across the sector.
Focus Shifts to US Nonfarm Payrolls and Energy Crack Spreads
Market participants are turning their full attention to upcoming macro indicators, specifically the health of the US labor market. The August Nonfarm Payrolls (NFP) report, scheduled for release at 1330 BST, carries a consensus estimate of 58,000 job additions. The US unemployment rate is expected to hold steady at 4.1%, while wage growth is projected to moderate slightly to 3.0% on an annual basis, down from 3.2% in the prior month. In energy markets, ultra-low sulphur diesel futures premiums over WTI crude surged past $100 per barrel for the first time on record, hitting an intraday peak of just over $102.00.
