Global Markets Soar as US Inflation Eases & China's Stimulus Boosts Stocks

Treasury yields and the dollar dropped while the Dow closed at a record high on Friday after a subdued U.S. inflation report. Global stocks also reached new heights due to China's stimulus efforts. All eyes are now on the Federal Reserve's upcoming interest rate decision in November.

In a week of remarkable financial movements, Treasury yields and the dollar dipped, and the Dow Jones Industrial Average hit a record high close on Friday. This came on the heels of a subdued U.S. inflation report, raising expectations for a more substantial interest rate cut at the Federal Reserve's November policy meeting.

Globally, stock markets also saw impressive gains, bolstered by stimulus measures from China. European shares posted an all-time high close, with China's blue chips and Hong Kong's Hang Seng index delivering their best weekly performances since 2008 and 1998, respectively. Japan's political developments also influenced financial markets, with the yen firming against the dollar post the expected appointment of Shigeru Ishiba as Japan's next prime minister.

Market analysts are now keenly observing the Federal Reserve, which began its latest easing cycle on Sept. 18 with a 50 basis point rate cut. Additional data showed U.S. consumer spending rose slightly less than expected in August. MSCI's global stock index and Europe's STOXX 600 have both hit record highs. All major U.S. stock indexes marked their third consecutive week of gains, reflecting the positive sentiment in the financial markets.

(With inputs from agencies.)