Asian and European stocks have seen growth on Thursday following slight gains on Wall Street, despite concerns over US bond yields and a slump in oil prices. The markets were initially shaken by strong US employment data and rising Treasury yields, which raised fears of longer-term interest rates. However, the 10-year US Treasury note, which reached its highest level in 16 years on Tuesday, fell after a lackluster US hiring report from payroll firm ADP. This report has raised hopes that the Federal Reserve may not keep interest rates elevated for an extended period.
London equities rose by 0.5 percent approaching midday, while Frankfurt and Paris each saw a 0.1 percent increase. Wall Street also experienced gains on Wednesday, ending a three-day losing streak, with the Nasdaq closing up by 1.4 percent. Stephen Innes, managing partner at SPI Asset Management, explained that weak economic data has contributed to gains in the US market, alleviating concerns about prolonged elevated interest rates.
However, oil prices have continued to fall, with Brent slumping by almost six percent and West Texas Intermediate shedding five percent on Wednesday. This drop in prices suggests weaker demand in the United States, the key consumer nation. The worries about high interest rates impacting economic growth have also contributed to the decline in crude prices. Victoria Scholar, head of investment at online trading firm Interactive Investor, explained that oil prices remain under pressure after experiencing their largest one-day drop in over a year.
As investors keep a close eye on US bond yields and oil prices, the markets will continue to navigate these uncertainties. The outcome of the Federal Reserve’s decision on interest rates will be closely watched, as it will have implications for the global economic outlook.
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