Nasdaq Hits 20,000 as ECB and SNB Eye Cuts

The Nasdaq surged past 20,000, fuelled by optimism following steady US CPI data and expectations of a Federal Reserve rate cut next week. Meanwhile, the ECB and Swiss National Bank are set to announce rate cuts, with markets anticipating a 0.25% cut for the ECB and a potential 0.5% cut for the SNB amid a slowing European economy and currency considerations. The yuan steadied after Beijing's intervention, as trade war concerns linger and US PPI data is awaited later today.

Equities

The FTSE 100 rose 0.3% on Wednesday, supported by gains in precious metal miners following US inflation data that aligned with market expectations. Endeavour Mining climbed 5.9%, leading the index, as higher gold prices bolstered the sector. Banking group Lloyds advanced 2.4% after a ruling granted Close Brothers permission to appeal a decision on motor finance commission disclosures.

Pearson added 3.2% after J.P. Morgan raised its target price for the stock to 1,400p. However, utilities and energy stocks lagged, with Shell slipping 1.2%, weighing on the broader index. Meanwhile, the mid-cap FTSE 250 remained flat.

On Wall Street, the Nasdaq surged past the 20,000 mark for the first time, rising 1.77% on the day, while the S&P 500 gained 0.82%. In contrast, the Dow Jones Industrial Average fell 0.22%, weighed down by a drop in healthcare stocks after lawmakers introduced a bipartisan bill targeting pharmacy benefit managers.

Tesla shares rose nearly 6% to a record high, continuing their rally following the US presidential election. Nvidia also gained 5.5%, while other tech giants like Alphabet and Amazon added over 1%. Broadcom saw a notable rise of 6.6% amid reports of collaboration with Apple to develop AI-focused server chips.

Healthcare stocks struggled, with companies like Cigna, CVS Health, and UnitedHealth Group declining after the proposed legislation raised concerns over their pharmacy businesses. Elsewhere, GameStop jumped 7.5% following a profit report driven by cost-saving measures, and Macy’s slipped 0.8% after cutting its annual profit forecast, citing weaker holiday demand.

US Treasuries saw yields rise, with the benchmark 10-year note yield increasing to 4.27%, reflecting market adjustments ahead of the anticipated Federal Reserve rate cut next week.

Forex & Commodities

The US dollar remained steady, trading at 106.58 on the dollar index after hitting its highest point since late November the previous day. Treasury yields provided some support, with the 10-year yield rising to 4.27%. The Australian dollar surged 0.77% to $0.6418 following unexpectedly strong employment data, while the yen slipped to 152.72 against the dollar as reports suggested the Bank of Japan might delay a rate hike. Sterling edged up 0.12% to $1.2766, while the euro gained 0.10% to $1.0507 ahead of the European Central Bank’s anticipated rate cut later in the day.

Gold prices slipped slightly after reaching their highest level since early November at $2,725.79 per ounce, with spot gold trading at $2,717.80 and US futures at $2,750.70. Profit-taking contributed to the slight pullback, though a low-interest-rate environment and geopolitical concerns remain supportive for the metal. Silver and platinum also saw gains, with silver up 0.8% to $32.15 and platinum climbing 0.7% to $946.05.

Oil prices were largely unchanged, with Brent crude at $73.66 a barrel and US WTI at $70.35. The market balanced increased US inventory levels with concerns over supply constraints due to new EU sanctions targeting Russia’s "shadow fleet" and expectations of higher Chinese demand.