The development of global markets in the past week was influenced by both the monetary policy decision of the U.S. central bank and fresh economic data, as well as investor sentiment, with the expectation that the strongest global economy will avoid a recession.

All three indexes of the New York Stock Exchange strengthened at the end of the past week. The technology-heavy Nasdaq index performed the best, gaining 1.9 percent. The main S&P 500 index rose by 1 percent, and the Dow Jones Industrial Average increased by half a percent.

U.S. stocks benefited from positive investor sentiment, as fresh data from the U.S. economy led them to believe that the U.S. economy will ultimately avoid a recession and achieve a so-called “soft landing.”

This means that after the energy and subsequent inflation crisis, there might not necessarily be a deep crisis, but inflation will be reduced to the target level of two percent after all the shock factors subside.

The monetary policy of the U.S. Federal Reserve will likely be adjusted accordingly. While the Fed raised interest rates one more time, it was likely the last such hike for a long time.

Other global stock markets also benefited from the optimism on Wall Street. World stocks rose, buoyed not only by the positive sentiment from the U.S. but also by new reports from Japan.

The local central bank slightly adjusted its monetary policy tools, primarily concerning rates tied to government bonds, while leaving its basic interest rate at -0.1 percent.

Source: Mandl, Kamdar – Reuters