By Chibuike Oguh and Marc Jones
NEW YORK/LONDON (Reuters) – World equity markets rose to a fresh new peak on Thursday while the U.S. dollar gained against major peers, buoyed by the Federal Reserve’s interest rate cut, while the pound dipped slightly after the Bank of England kept rates unchanged.
On Wall Street, all three indexes were trading higher with the Nasdaq gaining more than 1%. Intel jumped more than 25% after Nvidia said it would invest $5 billion in the struggling U.S. chipmaker. Nvidia’s shares were up 2.6% on the session.
The Dow Jones Industrial Average rose 0.33% to 46,170.33, the S&P 500 rose 0.68% to 6,644.94 and the Nasdaq Composite rose 1.15% to 22,517.77.
The pan-European STOXX 600 index rose 0.79%. MSCI’s gauge of stocks across the globe rose 0.39% to 980.12, topping the previous session’s record.
“Today’s market action is pretty interesting,” Sandy Villere, portfolio manager at Villere & Co in New Orleans.
“The Nasdaq is up more than the Russell 2000. I would’ve thought the Russell 2000 would start to act really well in the face of what looks like two more cuts in 2025. Small caps tend to do quite well in falling interest rates, but I think with the investment of Nvidia into Intel kind of has the NASDAQ maybe up just from that fundamental standpoint.”
The Fed cut rates by 25 basis points on Wednesday and its closely watched “dot plot” had pointed to two more rate cuts over its remaining two meetings this year, but only one additional reduction in 2026.
The yield on benchmark U.S. 10-year notes rose 4.2 basis points to 4.118%.
The BoE voted 7-2 to keep rates unchanged at 4% while slowing the annual pace at which the BoE sells gilts it purchased between 2009 and 2011 to 70 billion pounds from the current 100 billion pounds, in line with economist forecasts.
The dollar strengthened 0.47% to 0.792 against the Swiss franc and was up 0.66% to 147.94 against the Japanese yen.
The euro down 0.27% at $1.178 while the sterling weakened 0.57% to $1.3548.
Norway’s central bank cut its policy interest rate by 25 basis points to 4.0%, as widely expected, and said it aims to cut again in the next 12 months but not by as much as previously planned. The Norwegian krone remained near a three-year high.
Germany’s parliament approved the nation’s first annual budget since sweeping reforms to loosen fiscal rules were passed earlier this year. In France, hundreds of thousands took part in anti-austerity protests, unions said, urging President Emmanuel Macron and his new Prime Minister Sebastien Lecornu to acknowledge their anger and scrap looming budget cuts.
The yield on the benchmark German 10-year Bunds, the benchmark for the euro zone bloc, rose 4.1 basis points to 2.718%.
Oil prices fell. Brent crude futures dropped 0.68% to $67.49 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 0.73% to $63.58.
Gold prices took a breather from record highs. Spot gold fell 0.55% to $3,639.52 an ounce.
(Reporting by Chibuike Oguh in New York; Editing by Andrew Heavens, Philippa Fletcher and Nick Zieminski)
