Reduced rate-hike expectations help US stocks break a losing streak

• First weekly gain for global markets this month.
• Reduced rate-hike expectations help stocks break a losing streak.
• Nasdaq posted its highest weekly gain since March, rising 7.5%. FTSE All-World index of developed.

Friday marked the first weekly gain for global financial markets this month, as investors reassessed how active central banks will need to be in order to reduce excessive inflation in light of looming recession fears.

Recent lackluster economic data has reverberated throughout the markets, with traders swiftly reducing their expectations for the Federal Reserve’s policy tightening this year as growth slows.

Read More: European stocks open downward after Fed issues a recession warning

The S&P 500 index rose by 6.4% for the week, including a 3.1% gain on Friday, with 96% of its constituent businesses climbing. The tech-heavy Nasdaq Composite posted its highest weekly gain since March, rising 7.5%. The greater evaluations of technology equities make them especially susceptible to increasing interest rates.

The US rise set the tone for a broad global rally, as the FTSE All-World index of developed and emerging market shares posted a 4.7% weekly gain.

Overnight financing markets on Friday revealed traders’ expectations that the Federal Reserve will continue to raise interest rates this year, but that December’s increase would be the last before reversing course to support a slowing economy.

Read More: UK interest rates: Rising interest rates hurt UK Public budgets

Next year, investors anticipate a quarter-point rate drop, followed by another easing in 2024.

The yield on the benchmark 10-year US Treasury note, which sets the tone for borrowing prices worldwide, has decreased significantly during the past two weeks as recession fears have risen to the forefront. On Friday, the yield was 3.13 percent, down about 0.4 percentage points from its 11-year peak on June 14.