San Francisco Frontiers - Stock markets rally as rate cut outlook improves

The Federal Reserve said Wednesday it saw three cuts to US borrowing costs in 2024 after voting to hold interest rates at a 23-year high.

On Thursday, the central banks of England and Norway similarly held rates steady but also suggested they could soon cut should inflation continue to ease.

"Like the US Federal Reserve yesterday, BoE policymakers appear keen to validate financial market expectations of rate cuts starting in summer," said Kallum Pickering, senior economist at Berenberg bank.

And the Swiss National Bank (SNB) on Thursday became the first major central bank to cut rates since the end of a global tightening cycle, claiming the battle against inflation was working.

All the main Wall Street stock indices built on the record highs they hit late Wednesday after the Fed's announcements. Frankfurt and Paris reached new all-time peaks before pulling back somewhat. London gained almost 2 percent.

Recent data indicating strong jobs growth and sticky inflation in the United States had led some investors to fret that the Fed would delay its interest rate cuts.

But "one of the more notable mentions from (Fed Chair Jerome) Powell was the fact that strong job growth, in and of itself, is not a reason to hold off on cutting rates," said Kevin Gordon, investment strategist at Charles Schwab.

"I think that's a subtle hint at the fact that they are quite optimistic on labor supply and productivity."

Apple was down more than three percent after US Department of Justice and 17 US states sued the company, accusing it of maintaining a monopoly for its iPhone ecosystem by stifling competition and imposing exorbitant costs on consumers.

Gold hit a fresh record of $2,220 an ounce, before retreating, as US rate cuts could weigh on the dollar. However, the dollar's decline against the euro was limited by weak eurozone manufacturing data, which indicates the European Central Bank could match the Fed's rate cuts.

Oil continued to slide on profit taking after earlier this week hitting a five-month high.

- Key figures around 1640 GMT -

New York - Dow: UP 0.8 percent at 39,832.43 points

New York - S&P 500: UP 0.6 percent at 5,258.02

New York - Nasdaq Composite: UP 0.8 percent at 16,500.80

London - FTSE 100: UP 1.9 percent at 7,882.55 (close)

Paris - CAC 40: UP 0.2 percent at 8,179.72 (close)

Frankfurt - DAX: UP 0.9 percent at 18,179.25 (close)

EURO STOXX 50: UP 1.0 percent at 5,052.31 (close)

Tokyo - Nikkei 225: UP 2.0 percent at 40,815.66 (close)

Hong Kong - Hang Seng Index: UP 1.9 percent at 16,863.10 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,077.11 (close)

Euro/dollar: DOWN at $1.0863 from $1.0923 on Wednesday

Dollar/yen: UP at 151.70 yen from 151.36 yen

Pound/dollar: DOWN at $1.2670 from $1.2782

Euro/pound: UP at 85.72 pence from 85.44 pence

West Texas Intermediate: DOWN 0.6 percent at $80.81 per barrel

Brent North Sea Crude: DOWN 0.5 percent at $85.50 per barrel

R.Baker--SFF