A global share index hit a new high and Treasury yields fell dramatically on Friday after dismal U.S. economic data and Federal Reserve statements raised hopes for interest rate reduction later this year.
The Institute for Supply Management (ISM) manufacturing PMI slipped to 47.8 last month from 49.1 in January, the 16th straight month below 50. This suggests manufacturing contraction.
The University of Michigan consumer surveys found sentiment, present conditions, and expectations declining more than expected.
On Friday, Fed Governor Chris Waller raised optimism for lower interest rates by stating the Fed's balance sheet size doesn't affect its inflation campaign.
The U.S. personal consumption expenditures (PCE) report on Thursday met expectations and showed the lowest annual inflation growth in three years. "When you take all of it together, you're seeing the balance tilting a little bit more toward more rate cuts, which has supported equities," said BNY Mellon Wealth Management chief investment officer Sinead Colton Grant.
A stronger-than-expected earnings season and AI euphoria supported equities, she said. Richmond Federal Reserve President Thomas Barkin warned that U.S. price pressures remain and that it is too early to determine when the Fed would lower rates, but investors ignored his warning.
The S&P 500 closed at a record high for the second day in a straight on Wall Street, boosted by technology and dropping Treasury yields. The Dow Jones Industrial Average (.DJI) rose 90.99 points, or 0.23%, to 39,087.38, the S&P 500 (.SPX) jumped 40.81 points, or 0.80%, to 5,137.08, and the Nasdaq Composite (.IXIC) increased 183.02 points, or 1.14%, to 16,274.94.
MSCI's global stock index (.MIWD00000PUS), opens new tab, climbed 5.81 points, or 0.76%, to 767.09, a record high. The STOXX 600 (.STOXX), opens new tab index rose 0.6% after Eurostat reported that euro zone inflation fell to 2.6% in February from 2.8% a month earlier.
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