# Wall St heads higher as Fed rate hopes dent dollar
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-11-11
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Global Stocks Rise on Hope of Gradual Fed Rate Hikes
Meta Description: Follow the latest news on global stocks as peaking U.S. inflation eases rate hike concerns from the Federal Reserve, leading to a drop in the dollar.
URL: https://financedigest.com/wall-st-heads-higher-as-fed-rate-hopes-dent-dollarhtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-11-11t095257z1lynxmpeiaa0d8rtroptp4usa-fed-markets-tools-1736814884018-compressed.jpg)

By Huw Jones

LONDON (Reuters) – Global stocks rose on Friday for a second day on hopes that peaking U.S. inflation means less aggressive rate hikes from the Federal Reserve, leaving the [dollar facing its biggest two-day drop](https://www.financedigest.com/dollar-drops-as-inflation-cools-more-than-expected.html "Dollar drops as inflation cools more than expected") in almost 14 years.

Oil prices jumped after health authorities in top global crude importer China eased some of the country’s heavy [COVID curbs](https://www.financedigest.com/were-going-to-be-free-chinese-cheer-as-covid-curbs-are-loosened.html "‘We’re going to be free’: Chinese cheer as COVID curbs are loosened").

On [Wall Street](https://www.financedigest.com/wall-street-drops-treasury-yields-gyrate-on-fed-chairman-powells-remarks.html "Wall Street drops, Treasury yields gyrate on Fed Chairman Powell’s remarks"), stock futures were firmer, indicating that the S&P 500 and Nasdaq would add to their biggest daily percentage gains in over 2-1/2 years on Thursday after U.S. [data showed prices](https://www.financedigest.com/german-bond-yields-give-up-rise-after-u-s-price-data.html "German bond yields give up rise after U.S. price data") rose less-than-expected in October.

The MSCI all country stock index was up 1%, taking it [back to its highest levels since mid-September as investors](https://www.financedigest.com/glencore-courts-120-teck-investors-for-bid-backing-as-spinoff-vote-looms-source.html "Glencore courts 120 Teck investors for bid backing as spinoff vote looms -source") re-priced their interest rate expectations, though the benchmark is still down about 19% for the year.

“It’s more of a sigh of relief after a cacophony of bad news over the past month or so. While the [data may be improving](https://www.financedigest.com/5-ways-data-integration-solutions-are-helping-financial-organizations-deliver-improved-outcomes.html "5 Ways Data Integration Solutions Are Helping Financial Organizations Deliver Improved Outcomes") in the U.S., it’s certainly not the case in Europe,” said Mike Hewson, [chief markets](https://www.financedigest.com/impact-com-appoints-mike-head-as-cro-and-jenna-mills-as-director-public-relations-promotes-cristy-ebert-garcia-to-chief-marketing-officer.html "impact.com appoints Mike Head as CRO and Jenna Mills as Director, Public Relations, promotes Cristy Ebert Garcia to Chief Marketing Officer") analyst at CMC Markets.

[Fed policymakers on Thursday signalled a more gradual approach to hiking rates](https://www.financedigest.com/wall-street-slips-dollar-gains-as-fed-seen-hiking-rates-in-may.html "Wall Street slips, dollar gains as Fed seen hiking rates in May"), but made clear that the direction was firmly up to tame 40-year high inflation.

Market [bets on the Fed raising rates](https://www.financedigest.com/dollar-hits-one-month-high-against-yen-as-traders-bet-on-fed-rate-hike.html "Dollar hits one-month high against yen as traders bet on Fed rate hike") by 50 basis points at its next meeting in December, instead of 75 basis points, increased.

In Europe euro zone yields firmed and the EU’s executive European Commission said it [sees](https://www.financedigest.com/euro-7-emissions-proposals-the-sequel-europes-carmakers-dont-want-to-see.html "Euro 7 emissions proposals, the sequel Europe’s carmakers don’t want to see") a bigger euro zone slowdown in 2023, though only slightly affecting jobs or public finances.

Britain’s [economy shrank in the three months to September](https://www.financedigest.com/september-tropical-cyclones-cost-global-economy-more-than-4bn-according-to-aon-catastrophe-report.html "September tropical cyclones cost global economy more than bn, according to Aon catastrophe report") at the start of what is likely to be a lengthy recession.

John O’Toole, [global head](https://www.financedigest.com/new-york-catches-up-with-london-to-head-citys-global-centres-survey.html "New York catches up with London to head City’s global centres survey") of multi-asset investment solutions at asset manager Amundi, said the reaction in stock markets to the U.S. [inflation data showed investors were “pretty desperate” for good news and could be getting ahead](https://www.financedigest.com/dollar-dips-ahead-of-inflation-data-later-this-week.html "Dollar dips ahead of inflation data later this week") of themselves.

Even if we’re closer to the end than we are to the beginning of a tightening cycle, that doesn’t mean that [rates are not going to stay at an elevated level for an extended](https://www.financedigest.com/stocks-bonds-extend-rally-on-hopes-rate-hikes-ease.html "Stocks, bonds extend rally on hopes rate hikes ease") period of time, and that’s something that financial markets just don’t have in their outlook,” O’Toole said.

The [weaker outlook for corporate earnings and jobs has yet to be fully priced](https://www.financedigest.com/uk-house-prices-end-2022-on-a-weaker-note-after-pandemic-boom.html "UK house prices end 2022 on a weaker note after pandemic boom") into markets, he added.

[DOLLAR DIVE](https://www.financedigest.com/dollar-dented-as-consumer-sentiment-dives.html "Dollar dented as consumer sentiment dives")

[Investors poured into risky assets](https://www.financedigest.com/analysis-investors-face-expensive-quest-for-year-end-cash-and-safe-assets.html "Analysis-Investors face expensive quest for year-end cash and safe assets") after the U.S. data, with the dollar down 0.9%.

The yield on benchmark U.S. 10-year paper slipped below 4% on Thursday. U.S. [bond markets](https://www.financedigest.com/analysis-the-quiet-revolution-in-italian-bond-markets.html "Analysis: The quiet revolution in Italian bond markets") are closed on Friday for Veterans Day.

The data and market reaction are reminiscent of previous cycles of optimism regarding the ease with which the Fed might quell too-high [inflation,” Citi bank](https://www.financedigest.com/boes-bailey-says-rate-setters-can-put-inflation-before-bank-worries.html "BoE’s Bailey says rate-setters can put inflation before bank worries") said.

Asian shares scaled a seven-week high, with MSCI’s broadest index of Asia-Pacific shares outside Japan up 5.6%, set for its biggest one-day percentage jump [since March](https://www.financedigest.com/the-nasdaq-100-on-track-to-have-its-best-week-since-march-2010.html "The Nasdaq 100 On Track to Have its Best Week Since March 2010") 2020.

In China, health authorities on Friday eased the country’s heavy COVID-19 curbs, including shortening by two [days the quarantine times](https://www.financedigest.com/love-in-a-time-of-inflation-how-much-will-valentines-day-set-you-back.html "Love in a time of inflation: how much will Valentine’s Day set you back?") for close contacts of cases and inbound travellers.

The country’s blue-chip CSI 300 Index was up 2.8% and the Hang Seng Index surged 7.7%.

[Oil prices](https://www.financedigest.com/shares-fall-with-oil-prices-amid-concerns-about-u-s-fed-rate-hikes.html "Shares fall with oil prices amid concerns about U.S. Fed rate hikes") rose on Friday after the U.S. [inflation data](https://www.financedigest.com/dollar-trims-gains-vs-euro-after-u-s-inflation-data.html "Dollar trims gains vs euro after U.S. inflation data") but were on track for weekly declines of more than 4% due to COVID-related worries in China. \[O/R\]

U.S. crude rose 3.3% to $89.33 per barrel and Brent was at $96.44, up 3% on the day.

Elsewhere, the [crypto world remained gripped by the outlook for the crypto exchange](https://www.financedigest.com/exclusive-binance-moved-346-million-for-seized-crypto-exchange-bitzlato-data-show.html "Exclusive-Binance moved 6 million for seized crypto exchange Bitzlato, data show") FTX. [Regulators froze some assets of FTX](https://www.financedigest.com/bahamas-regulator-holds-ftx-assets-pending-delivery-to-customers-creditors.html "Bahamas regulator holds FTX assets pending delivery to customers, creditors") and industry peers raced to limit losses on Friday as solvency problems worsened.

The firm was scrambling to [raise about $9.4 billion from investors](https://www.financedigest.com/boe-raises-rates-again-as-investors-look-towards-end-of-hikes.html "BoE raises rates again as investors look towards end of hikes") and rivals, Reuters reported. FTX’s native token FTT was down 7.4% at $3.45, having fallen 90% month-to-date. Bitcoin fell 1.38% to $17,309.

(Reporting by Huw Jones; Editing by Edwina Gibbs, Barbara Lewis and Susan Fenton)


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---