Steady World Stocks and Strong Dollar Amid Trump Transition

Global stocks remained steady in cautious trading as investors adapt to the incoming Trump administration, scaling back expectations for U.S. interest rate cuts. The dollar remains robust against other currencies, buoyed by high Treasury yields, while U.S. stocks face end-of-year market adjustments and upcoming policy uncertainties.

As investors brace for the impact of the incoming Trump administration, world stocks held their ground on Tuesday. This cautious year-end trading sees a retreat from heavy bets on substantial U.S. interest rate cuts slated for 2025, thereby supporting the dollar against other global currencies.

In reflection of a tumultuous year, MSCI's world share index stayed flat but is poised to close 2024 with a notable 16% annual increase. This surge was largely driven by the U.S. markets, with the S&P 500 rising about 24%, dwarfing the gains in Asia-Pacific and European markets.

The economic landscape is marked by higher U.S. Treasury yields, with the 10-year note hitting a peak not seen since May. This shift is fueled by investors' concerns over inflationary pressures from Trump's proposed initiatives, potentially keeping U.S. yields elevated.

(With inputs from agencies.)