Global markets rise on Fed rate cut optimism

US stocks finished higher on Friday, with sentiment supported by a lighter PCE reading and stronger Michigan consumer data, which reinforced expectations of a 25 basis point Federal Reserve (Fed) rate cut this week. Core PCE rose 0.20% in September, bringing the annual pace down to 2.80%, while Michigan data showed improving confidence and softer near-term inflation expectations. According to Trading Economics, “mega caps led the advance, with Alphabet (1.20%), Meta (1.80%) and Broadcom (2.40%) posting the strongest gains. Netflix fell 2.90% after unveiling its Warner Bros Discovery deal, though losses later narrowed on reports of regulatory scrutiny. Tech strength broadened across the sector, with XLK logging a 10th straight advance and Salesforce jumping 5.30% on strong quarterly results.”  For the week, the S&P 500 rose 0.40%, the Nasdaq gained 0.90% and the Dow added 0.50%. 

Meanwhile, the dollar index traded below 99 points after two consecutive weeks of declines, pressured by growing expectations of a Fed rate cut this week. Still, uncertainty lingers around the path of policy into 2026, with some analysts expecting a “hawkish cut,” where Chair Jerome Powell signals a more measured and data-dependent approach to further easing.

European stocks edged higher, securing a second straight week of gains as investors weighed the 2026 rate outlook, rising AI-focused capital expenditure, and prospects for a Russia–Ukraine ceasefire. The STOXX 50 added 0.10% to 5 726 points for a 1% weekly gain, while the STOXX 600 finished flat at 579, up 0.40% from last Friday. The upward revisions to Eurozone labour figures aligned with the European Central Bank’s view that rates should remain on hold for now. Eurozone GDP growth for 3Q25 was revised slightly higher to 0.30% from 0.20%, outperforming the 0.10% expansion in the prior quarter. The upgrade was driven by a rebound in fixed investment, up 0.90% after a 1.70% decline in Q2, alongside stronger government spending, which rose 0.70% versus 0.40% previously.

Chinese equities finished the week slightly higher as investors looked ahead to key policy signals from high-level meetings this month. Markets are focused on the annual Central Economic Work Conference and the December Politburo meeting for guidance on Beijing’s policy direction and 2026 growth targets. Economists expect China to maintain its “around 5%” annual growth goal while keeping fiscal and monetary stimulus options open amid persistent deflation concerns. The Shanghai Composite rose 0.70% to 3 903 on Friday, while the Shenzhen Component gained 1.08%.

Friday saw the rand gain ground, strengthening to around R16.93/$, as confidence returned to the currency market. The improvement came after a narrower-than-expected current account deficit and a renewed round of Eurobond issuance — the first since 2024 — which helped shore up investor sentiment and foreign interest. On the equity side, the JSE held up even as global markets remained on edge. The broader local benchmark registered gains (1.33%), helped by commodity-linked stocks and a supportive backdrop of improving foreign-capital flows. 

Oil and gold ended the week steady. Brent crude hovered around $80 to 82 per barrel, and gold traded at roughly $2 060 per ounce. Crude held firm amid tight global supply and moderating demand, while gold edged higher on a softer dollar and lingering geopolitical uncertainty. The commodity complex remained supported, with both markets awaiting fresh macroeconomic data and policy signals for direction.