Global Markets Soar as Strong Economic Data Defies Central Banks' Caution

US Stocks Rise, Dollar Strengthens as Strong Data Counters Central Banks' Caution

Washington: US stocks rose and the dollar strengthened on Wednesday as strong economic data countered cautionary notes from central banks, according to a report by Bloomberg.

The S&P 500 Index climbed 0.6% to 3,955.75, while the Dow Jones Industrial Average advanced 0.5% to 32,824.92. The Nasdaq Composite Index gained 0.8% to 13,624.19.

The dollar index, which tracks the greenback against six major currencies, rose 0.4% to 95.64, its highest level since January 2020.

The data-driven rally came as the US Commerce Department reported that the country's gross domestic product (GDP) grew at a 2.1% annual rate in the third quarter, beating estimates of a 1.9% pace.

Additionally, the Federal Reserve's Beige Book report showed that the US economy continued to expand at a moderate pace, with most regions reporting growth.

The strong data countered cautionary notes from central banks, which have been warning of rising inflation risks. The European Central Bank (ECB) and the Bank of England (BoE) both raised interest rates this week to combat inflationary pressures.

Despite the central banks' caution, the US Treasury yield curve remained steep, with the 2-year yield rising to 4.08% and the 10-year yield climbing to 3.83%.

The strong US data and the dollar's strength weighed on gold prices, which fell 1.2% to $1,674.50 per ounce.

The US dollar's strength also helped to boost the Japanese yen, which rose 0.5% to 114.45 per dollar. The euro fell 0.4% to $1.1344, while the British pound fell 0.6% to $1.3144.

The strong US data and the dollar's strength are expected to continue to drive market trends in the coming days, with investors looking ahead to key economic indicators such as the US jobs report next week.