Investing.com - Global markets opened on a high note on Thursday, following a rally in US stocks prompted by cooling inflation data.
The S&P/ASX 200, KOSPI 200, and Nikkei 225 each saw gains of 0.7%, 1.7% and 0.3% respectively.
In the US, both the S&P 500 and the NASDAQ Composite reached new heights after traders increased bets on the Federal Reserve cutting rates this year due to easing inflation data.
The S&P 500 climbed 0.9%, bringing its total gains to 14% for the year, while the Nasdaq Composite, heavy with tech stocks, rose by 1.5%. The Dow Jones Industrial Average, however, dropped marginally by 0.1%.
Inflation data released on Wednesday showed a decline in May, and this broad-based slowdown in price pressures was less than the 3.4% expected by economists. This data was released ahead of the Federal Reserve's policy decision, and it showed that inflation rose 3.3% from a year ago, slightly down from April's reading.
Subsequently, Fed officials noted modest progress towards achieving their goal of 2% inflation in their June policy statement. As expected, the Fed kept interest rates steady and projected one rate cut for this year. However, traders are still betting on two cuts in 2024, with a 61% chance of at least two rate cuts this year, up from a 52% chance a day earlier.
On the commodities front, Brent crude oil was up by 0.7% to US$82.48 a barrel, while gold also rose to US$2,324.98. In local bond markets, the yield on Australian 2 Year government bonds dropped to 4.02%, and the 10 Year yield also decreased to 4.28%. US Treasury notes saw a decline, with the 2 Year yield at 4.75% and the 10 Year yield at 4.32%.
In Asia, Chinese shares closed mixed after May inflation data came largely in line with market expectations. Conversely, Hong Kong shares ended lower.
In Europe, shares closed higher, with the STOXX Europe 600 Index up 1.1%, Germany's DAX adding 1.4% and France's CAC 40 gaining 1.0%. Stocks in the U.K. also rose, with the FTSE 100 Index increasing 0.8%.