The Japan Times - US stocks rise for 3rd straight day while British pound advances

US equities rose for a third straight day as momentum builds following comments in recent days from Federal Reserve officials signaling another potential interest rate cut next month.

"It's hard to ignore that the dramatic shifts in rate-cut hopes have been the dominant market driver in recent weeks," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

All three major US indices climbed again, led by the tech-rich Nasdaq, which rose 0.8 percent.

Jack Ablin of Cresset Capital Management said the market could drift higher still if rate-cut expectations firm further.

Gains by small capitalization companies and so-called "value" stocks are signs of a "healthy rotation out of the very narrow mega-cap tech stocks into a broader set of companies that will benefit from lower financing costs," Ablin said.

Analysts also cited speculation that Kevin Hassett, director of the White House National Economic Council, could be President Donald Trump's next Fed Chief as supportive of markets because of expectations Hassett would cut interest rates further.

Meanwhile, the Fed's "beige book" of economic conditions around the United States pointed to a growing divergence in consumption, with lower-income populations pulling back.

"Overall consumer spending declined further, while higher-end retail spending remained resilient," said the report, adding that some retailers felt a negative hit from the record-long government shutdown.

In Europe, London stocks advanced and the pound pushed higher as the center-left Labour government delivered a tax-raising budget aimed at curbing debt and funding public services.

The yield on UK 10-year government bonds dipped, a sign that investors retained confidence in finance minister Rachel Reeves having control over public finances.

Kathleen Brooks, research director at XTB, said market reaction suggested Reeves had "passed a major hurdle" and that her measures "have fiscal credence with investors for now."

Paris and Frankfurt stocks also gained, supported by hopes of progress toward the end of Russia's war in Ukraine.

"Now, nothing is signed yet -- there's still a lot of negotiation left -- but markets have started to price in this deal, which is why both the euro and European stocks have rallied," said Forex.com analyst Fawad Razaqzada.

Russia said Wednesday that ongoing talks to end the war in Ukraine were "serious," after earlier welcoming parts of a new US plan to halt the deadliest fighting in Europe since World War II.

A deal was still a long way off, Russian officials warned, with US President Donald Trump's envoy Steve Witkoff due in Moscow next week for further talks.

But the negotiations were "ongoing, the process is serious," Kremlin spokesman Dmitry Peskov said in televised comments.

- Key figures at around 2120 GMT -

New York - Dow: UP 0.7 percent at 47,427.12 (close)

New York - S&P 500: UP 0.7 percent at 6,812.61 (close)

New York - Nasdaq Composite: UP 0.8 percent at 23,214.69 (close)

London - FTSE 100: UP 0.9 percent at 9,691.58 (close)

Paris - CAC 40: UP 0.9 percent at 8,096.43 (close)

Frankfurt - DAX: UP 1.1 percent at 23,726.22 (close)

Tokyo - Nikkei 225: UP 1.9 percent at 49,559.07 (close)

Hong Kong - Hang Seng Index: UP 0.1 percent at 25,928.08 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,864.18 (close)

Euro/dollar: UP at $1.1598 from $1.1570 on Tuesday

Pound/dollar: UP at $1.3239 from $1.3166

Dollar/yen: UP at 156.42 yen from 156.05 yen

Euro/pound: DOWN at 87.60 pence from 87.88 pence

Brent North Sea Crude: UP 1.0 percent at $63.13 per barrel

West Texas Intermediate: UP 1.2 percent at $58.65 per barrel

burs-jmb/ksb

H.Takahashi--JT