Global Equities Reach Record Highs as Market Rally Broadens

Global equity markets are edging closer to fresh record highs after a pivotal week that reinforced investor confidence in the Federal Reserve’s commitment to easing monetary policy. Clear signals that the US central bank’s rate-cutting cycle is still on track have removed a major source of uncertainty, helping set the stage for what many see as a potential year-end rally across global stocks.

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European shares led the charge, with the Stoxx 600 climbing as much as 0.5% to reach a new all-time high. Asian markets also remained firmly in rally mode, with a key regional benchmark trading within roughly 2% of its own record peak.

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In the US, S&P 500 futures dipped modestly, coming off the back of a session in which the index closed at an unprecedented level. Other major US benchmarks followed suit, as both blue-chip and small-cap stocks pushed into uncharted territory.

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Still, gains were not entirely smooth. Global stocks trimmed some of their advances after China announced plans to introduce export-license controls on certain steel products beginning next year. The move served as a reminder that trade tensions have not fully disappeared and continue to pose a risk to market stability. Throughout the year, similar policy signals have periodically sparked volatility, even as broader trends have remained constructive.

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Despite those headwinds, Friday’s rally highlighted an important shift beneath the surface of the market. Technology stocks underperformed relative to other sectors, suggesting that gains are becoming more evenly distributed. This broadening participation has helped place a major global equity index on course for its third straight year of gains, underscoring the resilience of risk appetite.

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One notable exception within tech was Broadcom Inc. Shares of the semiconductor company slid 4.8% in premarket trading after its revenue outlook fell short of elevated expectations. Broadcom has been positioning itself as a serious competitor to Nvidia Corp. in the fast-growing artificial intelligence computing market, making the disappointment more pronounced. Reflecting this weakness, Nasdaq 100 futures declined about 0.4%, even as other parts of the market remained steady.

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Market sentiment continues to lean heavily toward optimism. Karen Georges, a fund manager at Ecofi Investissements in Paris, noted that many investors are increasingly convinced a so-called Christmas rally is all but inevitable. In her view, the absence of any obvious negative catalyst before year-end is reinforcing that belief.

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Georges added that investors are actively rotating into stocks that have lagged earlier in the year, seeing the current environment as an attractive opportunity to diversify portfolios while maintaining exposure to equities.

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The Federal Reserve played a central role in sustaining this upbeat mood. On Wednesday, policymakers delivered a third consecutive interest-rate cut, further easing financial conditions. Fed Chair Jerome Powell struck a confident tone, suggesting the US economy is likely to gain strength as the inflationary effects of tariffs gradually diminish.

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While the Fed’s updated projections still point to just one rate cut in 2026, financial markets remain unconvinced, with traders continuing to price in the possibility of two reductions.

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Currency and bond markets reflected the shifting outlook. Bloomberg’s dollar index hovered near a two-month low on Friday and was on track to post its third weekly decline, signaling reduced demand for the greenback as rate expectations soften. Meanwhile, US Treasury yields edged slightly higher, with the 10-year yield rising by one basis point to around 4.17%.

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Commodities also reacted positively to the Fed’s dovish stance. Copper prices surged to a new record high, supported by broader strength across industrial metals. Gold extended its advance for a fourth consecutive session, benefiting from a weaker dollar and falling real yields, while silver pushed further into record territory. In the energy market, oil prices rebounded sharply after settling at their lowest level in nearly two months, aided by improving sentiment around global growth prospects.

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Taken together, the latest moves across equities, currencies, bonds, and commodities point to a market environment still driven by confidence in central bank support and economic resilience.

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While trade policy risks and sector-specific disappointments remain, investors appear willing to look past short-term noise. With major indexes hovering near record levels and liquidity conditions improving, the path into year-end continues to favor risk assets, reinforcing expectations that the rally may have more room to run.

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