Global stock markets ended Tuesday on a strong note, fuelled by softer-than-expected U.S. inflation figures and renewed optimism over trade relations between Washington and Beijing. The combination of encouraging economic data and a 90-day extension to the U.S.–China trade truce sent equities to multi-month highs across major regions.
Wall Street rallies on rate cut expectations
In the United States, the S&P 500 gained 1.13%, the Nasdaq climbed 1.39%, and the Dow Jones Industrial Average rose 1.10%, with the first two indices closing at record highs. July’s Consumer Price Index increased just 0.2% from the previous month, slightly below forecasts, reinforcing expectations that the Federal Reserve could lower interest rates as early as September. Technology stocks led the rally, while financials benefited from a steeper yield curve.
European indices track global momentum
European equities mirrored the upbeat tone from Wall Street. London’s FTSE 100 added 0.9%, while Germany’s DAX rose 1.2% and France’s CAC 40 advanced 1.1%. The trade truce extension between the world’s two largest economies eased concerns over supply chain disruptions, supporting export-oriented stocks. Energy and industrials also posted strong gains as commodity prices remained stable.
Asia-Pacific markets surge
Asian trading earlier in the day had set the stage for the global rally. Japan’s Nikkei 225 jumped 2.5% to an all-time high, supported by technology and auto shares. Hong Kong’s Hang Seng Index climbed 1.7%, while the Shanghai Composite added 0.9% amid hopes for improved trade flows. Australia’s ASX 200 also closed at a record, buoyed by mining and banking sectors.
Currency and commodity movements
The U.S. dollar weakened slightly against major currencies as traders priced in a more dovish Fed policy stance. Gold prices edged higher to $2,430 per ounce, reflecting sustained investor demand for safe-haven assets, while oil prices were stable with Brent crude trading near $82 a barrel.
Market outlook
Analysts suggest that the dual boost from favourable inflation data and trade diplomacy could sustain market momentum in the short term. However, attention will now shift to upcoming U.S. retail sales figures and further central bank commentary, which may influence the timing and scale of potential rate cuts.
REFH – Newshub, 13 August 2025
