Global stock markets presented a mixed picture on Friday, driven by hopes for sustained US central bank rate cuts, yet tempered by inflation concerns that sparked pre-weekend selling. The prospect of rate cuts by the Federal Reserve, not only this month but also throughout next year, buoyed market sentiment. However, these expectations are contingent upon the US experiencing tame inflation. The latest personal consumption expenditures (PCE) index, the Fed’s preferred inflation gauge, was in line with forecasts but failed to alleviate concerns about a “sticky inflation situation,” according to Bret Kenwell, a US Investment Analyst at eToro.
In other news, Netflix’s announced takeover of Warner Bros. Discovery garnered significant attention on Wall Street. This deal represents the largest consolidation in the entertainment sector this decade, though it may face regulatory hurdles due to its size. Consequently, Netflix shares dipped around 3% in late-morning New York trading, while Warner Bros. Discovery shares rose by nearly the same margin.
Earlier in Asia, the Indian central bank’s rate cut boosted Mumbai equities, and the rupee, which had hit a record low against the dollar, saw a rebound. Notably, shares in Moore Threads Technology, a Chinese company producing chips for the artificial intelligence sector, surged over 500% on its Shanghai market debut after raising $1.1 billion in an initial public offering. This significant IPO is seen as a barometer for faith in China’s next-generation AI-chip ambitions, as observed by Dilin Wu, a research strategist at Pepperstone.
In Europe, shares in Swiss Re declined more than 6% after the reinsurance giant’s profit target for 2026 and share buyback plans disappointed financial analysts. Key market figures at the close included the Dow up 0.2% at 47,942.10 points, the FTSE 100 down 0.5% at 9,667.01, and the DAX up 0.6% at 24,028.14. The euro/dollar exchange rate was down at $1.1634, and the pound/dollar rate also declined to $1.3325. Oil prices saw a slight increase, with Brent North Sea Crude up 0.6% at $63.61 per barrel and West Texas Intermediate up 0.5% at $59.95.
These developments underscore the complex interplay of factors influencing global stock markets, from monetary policy and inflation to corporate deals and regulatory scrutiny. As markets navigate these challenges, investors will closely watch the Federal Reserve’s next moves, the progression of the Netflix and Warner Bros. Discovery deal, and economic indicators for signs of what’s to come in 2026.
