Volkswacht Bodensee - Stock markets rise awaiting US rate cut next week

More data this week suggesting the Federal Reserve was winning the battle against inflation provided an extra kick for global equities after recent drops caused by worries of a possible US recession.

Wall Street opened higher while European stock markets extended gains, a day after the European Central Bank cut its own rates for the second time this year as inflation cools.

Asia's main stock markets diverged as they closed out the week.

The price of gold struck an all-time high $2,583.45 per ounce, as lower interest rates tend to prop up the precious metal.

Among companies, Boeing shares fell two percent after thousands of factory workers voted to strike,

Investors are focused on the highly anticipated Fed meeting on Wednesday after data this week showed US consumer inflation slowed more than expected in August to 2.5 percent.

Having slashed rates in the early months of the pandemic, the Fed began hiking them in 2022 as inflation started to take hold, and they kept lifting until rates hit a two-decade high.

Now, with disinflation seemingly kicking in and the labour market softening, decision-makers are tipped to start cutting again, with debate on whether it will be a 25 or 50-basis-point move.

"Fears that the Federal Reserve may have kept interest rates too high for too long, thereby risking an economic 'hard landing' have dissipated," said David Morrison, senior market analyst at financial services provider Trade Nation.

Markets had panicked last month after weak US jobs figures raised concerns that the world's economy could be heading towards recession.

Analysts said the odds of a 50-basis-point increase have risen this week.

"Gold is the ultimate inflation hedge, so it has received a boost from prospects of a 50bp rate cut from the Fed," said Kathleen Brooks, research director at XTB trading platform.

- Key figures around 1345 GMT -

New York - Dow: UP 0.5 percent at 41,289.38 points

New York - S&P 500: UP 0.4 percent at 5,615.98

New York - Nasdaq Composite: UP 0.3 percent at 17,621.42

London - FTSE 100: UP 0.4 percent at 8,277.01

Paris - CAC 40: UP 0.4 percent at 7,462.72

Frankfurt - DAX: UP 0.8 percent at 18,659.58

Tokyo - Nikkei 225: DOWN 0.7 percent at 36,581.76 (close)

Hong Kong - Hang Seng Index: UP 0.8 percent at 17,369.09 (close)

Shanghai - Composite: DOWN 0.5 percent at 2,704.09 (close)

New York - Dow: UP 0.6 percent at 41,096.77 (close)

Euro/dollar: UP at $1.1092 from $1.1078 on Thursday

Pound/dollar: UP at $1.3143 from $1.3126

Dollar/yen: DOWN at 140.48 yen from 141.78 yen

Euro/pound: UP at 84.39 pence from 84.36 pence

Brent North Sea Crude: UP 0.7 percent at $72.48 per barrel

West Texas Intermediate: UP 0.8 percent at $69.53 per barrel

L.Meier--VB