Global stocks headed for a third straight weekly gain as investors returned to the artificial intelligence trade and cooling US inflation bolstered bets that the Federal Reserve would refrain from raising interest rates.
MSCI’s Asia Pacific share benchmark rose 0.2% Friday, putting the All Country World Index on course for its longest weekly winning streak since April.
The global gauge closed at a record high Thursday, as did the S&P 500 Index, as semiconductor shares extended their rebound from last month’s selloff. Futures contracts pointed to gains in Europe, where stocks hit a peak earlier this week. South Korea’s Kospi Index — a bellwether for AI investment — added almost 1.8% Friday, bringing its weekly gain to 10% and snapping a seven-week losing streak.
Samsung Electronics Co. and SK Hynix Inc. both advanced more than 15% over the past five days. Treasuries held on to this week’s gains, bolstered by two days of benign US inflation numbers, with shorter-maturity notes outperforming their longer-dated counterparts.
The yield on the rate-sensitive two-year note was little changed at 4.15%, after falling six basis points Thursday, ahead of US retail sales data. Money markets are now pricing in about a 35% chance of a Fed rate hike in September, despite a recent rally in crude oil prices and no sign of a deal to ease Middle East tensions.
Back-to-back benign inflation prints, coupled with last week’s softer-than-expected jobs report, eased pressure on policymakers to tighten policy at its meeting next month, allowing equity traders to turn their attention to the revival in the AI trade.
