Global Stocks Trade Cautiously Ahead of Key US Inflation and Jobs Data

Global markets traded narrowly on Thursday as investors pulled back after months of strong gains, with attention now shifting to upcoming US inflation and jobs data expected to shape the next wave of market movement.

The rally that followed Donald Trump’s April tariff announcement has been fueled by new trade deals and expectations of Federal Reserve rate cuts. Last week, the Fed reduced interest rates, citing a weak labor market and subdued inflation, and signaled the possibility of two more cuts before year-end. However, Fed Chair Jerome Powell has urged caution, warning that inflation remains elevated and that “there is no risk-free path” on rates. His remarks, alongside a comment that equities are “fairly highly valued,” have cooled some of the earlier optimism.

This week, traders are closely watching the release of the Fed’s preferred inflation measure — the personal consumption expenditure (PCE) index — while next week’s non-farm payrolls data is also expected to influence sentiment.

In Asia, Tokyo’s Nikkei rose 0.2 percent, while Hong Kong was flat despite a strong showing from Alibaba, which added more than 1 percent following a 9 percent surge the day before on news of expanded AI investment. US-listed Alibaba shares also climbed over 8 percent. Meanwhile, Chery Automobile jumped 13 percent on its Hong Kong trading debut after raising $1.2 billion in its IPO. Markets in Shanghai, Sydney, and Singapore edged lower, while Seoul, Taipei, and Manila were little changed. On Wall Street, the three main indexes recorded their second straight day of losses.

Economists at Bank of America remain optimistic, suggesting that fiscal support, Fed cuts, and broadening corporate profits could fuel stronger GDP and earnings growth into 2026, making a boom scenario more likely than stagflation or recession.

Key Figures at 0230 GMT:

Tokyo (Nikkei 225): +0.2% at 45,719.71

Hong Kong (Hang Seng): Flat at 26,525.03

Shanghai (Composite): -0.1% at 3,850.15

Euro/Dollar: $1.1745 (up from $1.1737)

Pound/Dollar: $1.3455 (up from $1.3445)

Dollar/Yen: 148.74 (down from 148.91)

Euro/Pound: 87.30 pence (up from 87.29)

WTI Crude: -0.4% at $64.73/barrel

Brent Crude: -0.3% at $69.09/barrel