Global equities stabilized on Thursday as investors paused after a four-day rebound driven by rising conviction that the US Federal Reserve is preparing to cut interest rates sooner and more aggressively than previously expected. With US markets closed for Thanksgiving, trading volumes were thinner, but risk sentiment remained resilient, helping the MSCI All Country World Index hold steady and preserve the bulk of its recent recovery. The gauge, which had been down nearly 4% earlier in November, has now trimmed its monthly decline to just 0.4%, signaling a notable shift in global investor positioning.

Fed Easing Expectations Fuel Market Optimism

At the heart of the equity rebound is a recalibration of monetary policy expectations. Money markets now assign roughly an 80% probability to a quarter-point rate cut in December, up sharply from the prior week’s pricing, while traders project three additional cuts by the end of 2026. This represents a significant change from earlier forecasts that expected only three cuts in total as recently as mid-November.

The shift reflects softening US macro indicators and growing confidence that the Fed will act pre-emptively to cushion the economy from a late-cycle slowdown. Investors have interpreted the updated trajectory as supportive for global equities, particularly as concerns over stretched tech valuations had weighed heavily on markets earlier in the month. According to Daniel Murray, CEO of EFG Asset Management Switzerland, the backdrop is beginning to resemble conditions for a “classic year-end rally,” supported by stable macro trends and improving corporate earnings visibility.

Global Market Performance: Mixed but Supported

Asian markets were among the strongest performers during Thursday’s session. Japanese equities gained momentum, while South Korean stocks also outperformed, with technology shares driving both markets higher. These moves highlight renewed investor appetite for growth-oriented sectors that had previously faced heavy selling pressure.

In Europe, the picture was more balanced. Germany’s DAX advanced 0.3% as athletic-apparel maker Puma surged 16% on reports of takeover interest from multiple bidders. UK assets, meanwhile, experienced modest pullbacks following a strong rally on Wednesday, when Chancellor Rachel Reeves unveiled her Autumn Budget. While the budget expanded the government’s fiscal buffer, its tax-raising measures cast uncertainty over the growth outlook. Gilt yields edged higher, while the pound and the FTSE 100 were largely unchanged.

Elsewhere, Bitcoin briefly topped $91,000, reflecting broader improvement in risk appetite after a week of volatility. The US dollar paused its recent retreat, offering some stability across foreign-exchange markets.

Commodities and Geopolitical Considerations

Oil prices fluctuated after Russian President Vladimir Putin suggested that elements of a US-backed peace proposal for Ukraine could form the basis of a future agreement. While no finalized draft exists, the remarks added a layer of geopolitical complexity to commodity markets already influenced by softening demand expectations. Platinum extended its rise, benefiting from optimism around fresh Chinese demand following the launch of a new futures contract.

Looking Ahead

With US markets set to reopen after Thanksgiving, the next major catalysts include fresh economic data and commentary from global central banks. Investors will remain focused on whether rate-cut expectations can sustain the recent rally, or whether geopolitical and corporate risks—such as ongoing stress in China’s property sector—will reintroduce volatility. For now, markets appear cautiously optimistic, supported by the prospect of monetary easing and resilient corporate fundamentals heading into year-end.