By Caroline Valetkevitch
NEW YORK (Reuters) – Global stock indexes hit record highs on Thursday after chipmaker Micron Technology’s (NASDAQ) upbeat forecast, while oil fell following a media report that Saudi Arabia plans to drop its unofficial crude oil price target of $100 per dump barrel.
Silver rose to its highest level in almost a dozen years, as interest rate cuts by major central banks boosted interest in investing in precious metals.
The index recorded an all-time high, just like the pan-European index. MSCI’s global stock index has reached an intraday record.
Micron’s forecast late Wednesday boosted optimism about demand for chips used for artificial intelligence. Shares of Micron rose 14.7% on Thursday, while an index of semiconductors rose 3.5%.
U.S. Treasury yields rose slightly after strong data, including an unexpected drop in U.S. weekly jobless claims, prompted traders to cut bets that the Federal Reserve would cut another 50 basis points at its November meeting.
Last week’s interest rate cut by the US central bank was the first cut in borrowing costs since 2020.
“There’s a lot of focus on the labor market in terms of what the Fed will do next,” said Zachary Griffiths, senior investment grade strategist at CreditSights.
Other US reports showed corporate profits rose at a stronger pace than initially thought in the second quarter, while gross domestic product grew at an unchanged 3%.
Investors are eagerly awaiting Friday’s release of the key personal consumption expenditures (PCE) price index, the Fed’s preferred inflation measure.
The index rose 260.36 points, or 0.62%, to 42,175.11, the S&P 500 rose 23.11 points, or 0.40%, to 5,745.37 and was up 108.09 points, or 0. 60%, higher to 18,190.29.
European shares followed the Chinese market higher. The pan-European STOXX 600 index closed 1.3% higher at 525.61 points, an all-time high. MSCI’s global stock index rose 7.08 points, or 0.84%, to 850.69, hitting a record in trading.
In Europe, China-exposed stocks such as luxury goods companies and mining companies performed better.
An official readout from a meeting of China’s Politburo said Beijing would deploy “necessary fiscal spending” to meet this year’s economic growth target of around 5%, recognizing emerging challenges and raising market expectations for new stimulus measures on top of those imposed were announced this week.
Reuters reported separately that China plans to issue special government bonds worth about 2 trillion yuan ($284 billion) this year, mainly to boost consumption.
In commodities, spot silver rose 0.6% to $32.03 an ounce on Thursday afternoon, after hitting its highest since December 2012 at $32.71. rose 0.5% to $2,670.52 an ounce after hitting a record high of $2,685.42 earlier in the day.
fell $2.02 to $67.67 per barrel and fell $1.86 to $71.60.
Saudi Arabia is preparing to abandon its unofficial $100 per barrel price target for crude oil as it prepares to increase production, the Financial Times reported Thursday, citing people familiar with the matter.
On government bonds, the ten-year yield rose by 0.8 basis points to 3.789%, having previously reached 3.821%, the highest level since September 4.
Traders are now pricing in a 51% probability that the Fed will cut rates by 50 basis points at the end of the Nov. 6-7 meeting, up from 63% before the latest data, according to data from CME Group (NASDAQ 🙂 FedWatch tool.
The dollar fell after US data showed a relatively healthy economy, while the Swiss franc rose after the country’s central bank cut interest rates.
The Swiss National Bank cut rates by 25 basis points on Thursday, opting not to make a larger 50 basis point move that markets had seen as a possibility. It was the SNB’s third step this year.
Against the Swiss franc, the dollar weakened 0.52% to 0.846.
Elsewhere, policy doves at the European Central Bank are preparing to battle for a rate cut next month after a string of weaker-than-expected economic data, a move likely to meet resistance from their more conservative counterparts, seven sources told Reuters.
The , which measures the dollar against a basket of currencies including the yen and euro, fell 0.42% to 100.52, on track for its sixth decline in seven sessions after falling to 100.95 earlier in the day have increased. The euro rose 0.41% to $1.1178.
