Global stock markets edged higher on Thursday, 27 November 2025, as investors increasingly priced in a Federal Reserve rate cut in December. The holiday-shortened week in the United States kept trading activity muted, but a broadly positive tone dominated both equities and currencies. Meanwhile, the Japanese yen remained in focus as it hovered in the intervention zone, with traders assessing the Bank of Japan’s next moves.

US Stock Markets and Fed Rate Cut Expectations

U.S. markets were closed for Thanksgiving and are scheduled for a shortened session on Friday. Despite the break, optimism over a near-certain Fed rate cut next month supported stock prices. European equities followed suit, with the STOXX 600 index opening modestly higher, buoyed by gains in defence and technology stocks, offsetting losses in the healthcare sector.

According to Chris Beauchamp, chief markets strategist at IG, the current earnings season and solid corporate performance have pushed valuation concerns to the background, allowing stocks to rally. He added that renewed worries over AI-related spending remain the biggest potential risk, describing it as “the market’s kryptonite.”

In the U.S., stocks closed higher on Wednesday, with both the Dow Jones Industrial Average and S&P 500 gaining more than 0.6%, reflecting confidence in ongoing corporate earnings and rate-cut expectations.

Investors Rely on Fed Guidance

With limited fresh macroeconomic data following the recent 43-day government shutdown, traders have leaned heavily on Federal Reserve officials’ comments for guidance on interest rate direction. Fed officials, including San Francisco Fed President Mary Daly and Governor Christopher Waller, reinforced expectations for a December rate cut.

Market participants now assign an 85% probability to a rate reduction next month, up from just 30% a week earlier, according to CME FedWatch data. Analysts like George Boubouras, managing director at K2 Asset Management, noted that labour market weakness could offset persistent inflation, which the Fed has signalled it can tolerate.

Yen Remains in Spotlight

The Japanese yen strengthened to 156.36 per U.S. dollar from nearly 158 last week, keeping it under scrutiny for potential currency intervention by Tokyo. Japanese authorities have issued repeated warnings to stabilize the currency, and the Bank of Japan (BOJ) is reportedly preparing markets for a possible rate hike next month to curb further depreciation.

Prime Minister Sanae Takaichi ruled out any scenario similar to the UK’s “Truss moment”, asserting that Japan’s fiscal policies remain credible and market confidence intact. Traders continue to monitor Japan’s monetary and fiscal signals closely as the yen’s trajectory remains a key factor for global markets.

Commodity and Crypto Market Update

• Bitcoin rebounded above $90,000, posting nearly a 3% gain and ending a four-week losing streak.
• Gold eased slightly by 0.15% to $4,157 per ounce after a 0.8% gain in the previous session.

Outlook

With U.S. equities supported by expectations of Fed easing, and yen intervention risks keeping currency markets tense, investors are focusing on corporate earnings, inflation signals, and global macroeconomic trends to guide trading decisions in the weeks ahead.