Gold Surges as Wall Street Awaits Federal Reserve Rate Cut

Wall Street remained largely unchanged and gold surged to a record high as investors awaited a Federal Reserve interest rate cut. U.S. stock indexes showed mixed results. The European Central Bank announced its second rate cut in three months due to slowing inflation. Oil prices also saw a significant rise.

Wall Street remained largely unchanged on Thursday while gold surged to a record high as investors awaited a Federal Reserve interest rate cut next week.

Major U.S. stock indexes fluctuated in midday trading following a rate cut from the European Central Bank and slightly higher-than-expected U.S. producer prices. The Dow Jones Industrial Average dipped 0.1%, the S&P 500 rose 0.14%, and the Nasdaq Composite climbed 0.37%, lifted by strong tech stock performance.

Globally, MSCI's stock gauge increased by 0.58%. Earlier, the ECB announced its second rate cut in three months, citing slowing inflation and economic growth. Attention now shifts back to the Fed, anticipated to announce its first rate cut since 2020 at next week's policy meeting. Fresh economic data further cooled expectations for a 50-basis-point cut, favoring a 25-basis-point reduction instead.

The dollar weakened against major currencies, while U.S. crude and Brent oil prices rose. Gold prices hit record highs as investors sought safer assets ahead of the expected Fed rate cuts. In bonds, 2-year Treasury yields climbed by 4.7 basis points, with 10-year yields up by 4.2 basis points.

(With inputs from agencies.)