By Alden Bentley and Naomi Rovnick
NEW YORK/LONDON (Reuters) – Global stock markets rose on Friday, with Wall Street capping November with its biggest monthly gain in a year on hopes of post-election growth, while the dollar weakened amid prospects for higher rates. firm in Japan and flexibility in Europe. .
Trading in the United States was thin the day after Thanksgiving. Many investors made it a long weekend and stocks and bonds closed early, so most of the month-end position adjustments were made before the holiday.
It rose 0.56% to mark the best monthly gain since November 2023 of 5.14%, while the Nasdaq’s 0.83% rise on Friday ensured a 6.2% gain for the month, its best since May.
MSCI’s broad gauge of global equities rose 0.52%, also securing the best month since May.
Donald Trump’s Nov. 5 election victory and promises of tax cuts, deregulation and import tariffs have raised investor expectations that U.S. stocks and Wall Street will continue to outperform other regions. US technology stocks are also benefiting from an AI investment craze.
Speculation about Japanese rate hikes fueled a rally in the yen, which ended with the biggest weekly gain against the dollar since July. The dollar fell 1.25% on the day to 149.65 yen. It sank 149.46 yen in late trading, the lowest since Oct. 21, under pressure after Japan’s government finalized a stimulus budget and inflation in Tokyo was higher than economists expected.
The , which measures the currency against six major rivals, fell 0.26% to 105.79, ending the week down 1.4% thanks to a sudden rally in the euro, which had been teetering toward the key marker of 1 dollar due to tariff fears and a gloomy outlook for the euro zone.
The prospects of lower rates in the United States have also weighed on the dollar. Trump’s import tariffs could boost US inflation, Federal Reserve officials have become cautious about rate cuts, while futures traders estimate the Fed will cut rates another 25 basis points in the December meeting at 65%. However, by 2025 they see less chance of the central bank continuing to lower rates at the same pace as this year.
“The dollar is a little weaker. That’s helpful for the multinationals in the S&P 500,” said Quincy Krosby, chief global strategist at LPL Financial (NASDAQ:) in Charlotte, North Carolina.
Trump has promised immediate 25% tariffs on all products from Mexico and Canada when he takes office in January and an additional 10% on imports from China, an important trading partner of Asian economies, and Germany, an export powerhouse in the area. euro.
“President-elect Trump has criticized Canada, Mexico and China for now, but Europe is not far down the list,” said strategists at BCA Research, recommending investors limit their exposure to European stocks and favor German government bonds. .
The euro closed the day up 0.21% at $1.0575. It has recovered from crushing losses since the Nov. 5 US election to gain 1.25% this week, supported by data on Friday showing higher euro zone inflation, limiting bets on deep rate cuts of the European Central Bank.
The STOXX European stock index rose 0.58%, while the European broad index rose 12.65 points, or 0.63%. Stocks in Asian and emerging markets took the biggest hits from tariff fears.
Although Tokyo’s fell a little on Friday, it ended November with a drop of 2.23%, despite the fact that Japan was not designated as a tariff target. MSCI’s broadest index of Asia-Pacific shares outside Japan showed a 2.35% loss for the month.
Traders have fully priced in a 25 basis point rate cut by the European Central Bank to 3% in December, although hawkish comments from board member Isabel Schnabel this week dampened speculation about a 50 basis point cut. .
The benchmark US 10-year bond yield fell 6.8 basis points to 4.174%. Investors bought government bonds this week after Trump nominated hedge fund manager and Wall Street veteran Scott Bessent as Treasury secretary, easing fears about excessive borrowing in the United States.
fell 0.42% to $68.43 a barrel and fell to $73.06 a barrel, down 0.3% the day after the ceasefire deal between Israel and Hezbollah in Lebanon eased fears on supply, while gold rose 0.42% to $2,652.09 an ounce.
In cryptocurrencies, bitcoin gained 2.23% to $97,252.72.