Global Markets Surge as Inflation Eases and Oil Prices Rally

Global equities rose and the dollar fell as core U.S. inflation data for December came in lower than expected, sparking hopes for potential Federal Reserve rate cuts. Oil prices also rallied following significant declines in U.S. crude stockpiles, though geopolitical developments shaded gains. Major U.S. indices saw notable increases.

Global markets experienced a surge on Wednesday as encouraging inflation data and rising oil prices bolstered investor sentiment. Core U.S. inflation for December rose less than anticipated, prompting speculation that the Federal Reserve might ease rates. This positive sentiment mirrored across major indices, with the Dow Jones, S&P 500, and Nasdaq all seeing significant gains.

The uptick in stocks was further fueled by impressive fourth-quarter earnings from financial giants like JPMorgan and Goldman Sachs. The Dow Jones climbed over 1.8%, buoying the MSCI global stock index which increased by 1.6%. Meanwhile, the U.S. dollar weakened against several major currencies, reflecting a shift in economic expectations.

Oil prices rallied amid substantial draws in U.S. crude inventories and potential geopolitical risks following new U.S. sanctions on Russia. On the commodities front, gold prices also rose, highlighting a mixed but optimistic market outlook as traders adjusted their forecasts for future Federal Reserve actions.

(With inputs from agencies.)