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Global equity markets surged to fresh record highs , fuelled by expectations of an imminent interest rate cut from the US Federal Reserve and upbeat sentiment across major regions.

The MSCI All Country World Index (ACWI) climbed as high as 954.21, extending Tuesday’s milestone before easing slightly to 952.83, up 0.60 per cent on the day.

Wall Street Rally Extends

On Wall Street, all three major US indices advanced, with the S&P 500 and the Nasdaq Composite securing record closes for a second straight session. The Dow Jones Industrial Average jumped 1.0 per cent, while the S&P 500 rose 0.32 per cent and the Nasdaq added 0.14 per cent.

Sector performance was mixed: materials, healthcare, and consumer discretionary stocks led the gains, while communication services, consumer staples, and technology edged lower.

Global Markets in Sync

The bullish momentum spilled across markets worldwide:

• Europe: Pan-European stocks rose 0.54 per cent, nearing a two-week high.
• Japan: The Nikkei 225 advanced for the sixth consecutive day, breaching the 43,000 level for the first time.
• Asia-Pacific: MSCI’s regional index outside Japan gained 1.54 per cent.

Inflation Data, Fed Signals

Analysts said softer-than-expected US inflation data provided the immediate trigger. The July consumer price index rose less than forecast, easing concerns over tariff-driven price pressures.

“It’s largely a continuation from yesterday’s momentum, with inflation clearly being the driver of the rally,” said Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions. “The data gives the Fed the green light for September.”

Traders are now pricing in a 94 per cent chance of a rate cut next month, sharply up from 57 per cent a month ago, according to the CME FedWatch tool. Some policymakers, citing weaker recent jobs data, have even hinted at the possibility of a half-point reduction.

Adding to optimism, President Donald Trump signed an executive order pausing new tariffs on Chinese imports for 90 days, offering temporary relief to trade tensions.

Bonds, Currencies, Commodities

• Bonds: US Treasury yields fell, with the 2-year note down 5.2 basis points to 3.679 per cent and the 10-year yield off 5.5 bps to 4.238 per cent.
• Currencies: The dollar weakened broadly. It slipped 0.32 per cent against the yen to 147.36, lost 0.12 per cent against the Swiss franc to 0.805, and fell 0.25 per cent on the dollar index to 97.79. The euro firmed 0.27 per cent to $1.1704.
• Commodities: Oil prices eased, with Brent crude down 0.74 per cent to $65.63 and WTI off 0.82 per cent at $62.65. Spot gold gained 0.34 per cent to $3,356.49 an ounce.