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Rate-hike fears ease, lifting stocks and lowering yields

Wall Street rallied by more than 1% on Thursday after Federal Reserve (Fed) Governor Christopher Waller signalled openness to holding rates steady this month should upcoming inflation figures cooperate, sending Treasury yields lower and pushing bitcoin above USD 80,000. The dovish tone carried into Friday’s session in Asia, where technology names led broad gains across Tokyo, Seoul and Hong Kong. Attention now turns to the US jobs report due later on Friday, which markets will scrutinise for further clues on the Fed’s next move.

  • Date
  • Auteur Shane Strowmatt, Senior Investment Writer
  • Temps de lecture 5 minutes

Wall Street green light
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Asian equity markets rose on Friday, led by technology shares, after Fed Governor Waller indicated he would support keeping US interest rates unchanged this month if forthcoming data confirm easing price pressures. Japan’s Nikkei gained more than 1.4%, while South Korea’s KOSPI rose 1.8% and Hong Kong’s Hang Seng climbed 1.9%, with SoftBank, Samsung Electronics, SK Hynix, Alibaba and Baidu among the strongest performers. Markets lowered the implied probability of a Fed rate increase this month to about 50% from 63%, while the US ten-year Treasury yield fell to 4.755%. Investors awaited US nonfarm-payroll data later on Friday, as Brent crude remained close to USD 96 per barrel amid concerns over Middle East energy supplies.

US stocks rally on rate hopes

US equities rose by more than 1% on Thursday following comments by Fed member Waller. The Dow Jones Industrial Average gained 1.2% to 53,686.11 points, while the S&P 500 rose 1.1% to 7747.71 and the Nasdaq-100 added 1.2% to 29,482.32 points. Chipmaker Broadcom fell 2.7% after its outlook disappointed, whereas bitcoin holder Strategy surged almost 18%, after bitcoin surged on Thursday and was trading around USD 80,900 on Friday morning.

Swiss growth and inflation accelerate

Swiss consumer-price inflation (CPI) accelerated to 0.8% year-on-year in August from 0.4% in July, exceeding expectations and reaching its highest level in two years, data released on Thursday showed. Higher rents and fuel prices, alongside the weaker Swiss franc’s effect on import costs, drove the increase, while core inflation edged up to 0.4% from 0.3%, indicating limited broader domestic price pressure. Separately, the State Secretariat for Economic Affairs confirmed that real gross domestic product grew 1.5% in the second quarter from the previous quarter, accelerating from 0.5% in each of the prior two quarters. Chemical and pharmaceutical production contributed 0.7 percentage points to growth, but output in the volatile sector may partly reflect timing effects; gains elsewhere in the economy and recovering domestic demand also supported activity. Switzerland’s SMI gained 0.2%, while the Euro Stoxx 50 gained 0.3% on Thursday.

US services strengthen as euro-area growth holds

US services activity accelerated in August, with the S&P Global Services PMI rising to 56.5 from 54.6 in July, its highest reading in 20 months, while the composite index climbed to a 52-month high of 56.0. Stronger new orders, including the first rise in export demand for nine months, supported the fastest employment growth since January 2025, although input and selling-price inflation remained above historical averages despite easing. Euro-area private-sector output grew at a steadier pace, as the composite PMI held at 52.0 and the services measure edged down to 51.6 from 51.7, with expansion in Spain and Italy offsetting France’s eighth consecutive contraction. Euro-area price pressures remained elevated and showed little improvement in August, suggesting that disinflation has stalled even as economic activity remains resilient.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: Italian retail sales (10:00), euro-area retail sales (11:00), US nonfarm payrolls (14:30), US unemployment rate (14:30), Canadian unemployment rate (14:30) and Canadian Purchasing Managers’ Index (16:00).

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.