Published by Global Banking & Finance Review®
Posted on November 25, 2025
4 min readLast updated: January 20, 2026
Add as preferred source on GoogleGlobal stocks rise as Fed rate cut expectations grow. US Treasury yields fall, with Alphabet and Meta leading market gains. Economic data influences sentiment.
By Chuck Mikolajczak
NEW YORK (Reuters) -Global stocks climbed on Tuesday and were set for a third straight session of gains, as investors remained optimistic the Federal Reserve would cut U.S. interest rates at its December meeting, while U.S. Treasury yields declined.
On Wall Street, U.S. stocks closed higher, boosted by gains in Alphabet and Meta Platforms. The Google parent ended up 1.53% at a record close of $323.44 as it neared $4 trillion in market capitalization, which would make it only the fourth company to reach that mark.
The Information reported that Meta Platforms, which advanced 3.78% as the biggest lift to the S&P 500, was in talks with Google to spend billions of dollars on the Alphabet unit's chips for use in its data centers starting in 2027.
Investors also parsed a flurry of economic data, some of which was delayed due to the 43-day U.S. government shutdown.
Retail sales rose 0.2% in September after an unrevised 0.6% gain in August, the Commerce Department said, short of the 0.4% rise expected by economists polled by Reuters.
The Labor Department reported that the Producer Price Index for final demand increased 0.3% after an unrevised 0.1% drop in August, which matched expectations, as the cost of energy goods surged and producers passed on some tariff costs.
More recent data on Tuesday from ADP said U.S. private employers shed an average of 13,500 jobs during the four weeks ending Nov. 8.
The Dow Jones Industrial Average rose 664.18 points, or 1.43%, to 47,112.45, the S&P 500 advanced 60.76 points, or 0.91%, to 6,765.88 and the Nasdaq Composite climbed 153.59 points, or 0.67%, to 23,025.59.
Equities have been rallying since Friday after New York Fed President John Williams said interest rates can fall in the near term even as other policymakers insisted borrowing costs should remain steady for now, which boosted market bets on a rate cut. Those expectations were further juiced on Monday after comments by San Francisco Federal Reserve Bank President Mary Daly and Fed Governor Christopher Waller in support of a December cut.
"We've had more coalescing just in the last couple of days around rate cut odds, that's fluctuated dramatically in the last week," said Bill Merz, head of capital market research at U.S. Bank Wealth Management in Minneapolis.
"And we have data this morning, again, with slightly softer labor markets, that should be a key consideration for Fed voting members, and I think it is. So those slightly soft labor markets corroborate that it wasn't just a blip, but that's persisting."
The increased rate-cut expectations also boosted small-cap stocks, with the Russell 2000 closing up 2.14%, its third straight session of gains.
Trading volume is likely to shrink as the U.S. Thanksgiving holiday approaches on Thursday, when markets will be closed, followed by an abbreviated session on Friday.
MSCI's gauge of stocks across the globe rose 9 points, or 0.92%, to 991.31 and was on track for its biggest three-day percentage gain in more than six months. The pan-European STOXX 600 index closed up 0.91%, lifted by the prospect of a Fed rate cut and optimism over a potential ceasefire in Ukraine.
U.S. yields fell after the glut of data. The benchmark U.S. 10-year note yield was down 3.4 basis points at 4.002% after dropping to 3.988%, its first break below 4% since October 29.
Markets are pricing in an 82.7% chance for a 25 basis-point cut from the Fed at its December meeting, well above the 50.1% from a week ago, according to CME's FedWatch Tool.
Fed Governor Stephen Miran said in a television interview that the job market was deteriorating because of where the central bank has set its short-term interest rate target.
The dollar index, which measures the greenback against a basket of currencies, declined 0.37% to 99.83, with the euro up 0.4% at $1.15667.
Sterling strengthened 0.47% to $1.3164 ahead of Britain's upcoming budget announcement on Wednesday, while traders piled into the options market seeking protection against heightened volatility.
Traders have been closely watching for signs of possible Japanese intervention in the yen, which strengthened 0.53% against the greenback to 156.09 per dollar but is down 1.3% for the month.
U.S. crude settled down 1.11% to $57.95 a barrel and Brent settled at $62.48 per barrel, down 1.4% after Ukraine signaled support for a U.S.-backed framework for ending the war with Russia.
(Reporting by Chuck Mikolajczak; additional reporting by Scott Murdoch in Sydney and Amanda Cooper in LondonEditing by Frances Kerry, Nick Zieminski and Richard Chang)
A central bank is a financial institution that manages a country's currency, money supply, and interest rates. It oversees the banking system and implements monetary policy.
The stock market is a collection of markets where shares of publicly traded companies are bought and sold. It serves as a platform for companies to raise capital and for investors to trade securities.
An interest rate cut is a reduction in the rate at which a central bank lends money to commercial banks. It aims to stimulate economic activity by making borrowing cheaper.
Economic growth refers to an increase in the production of goods and services in an economy over a period. It is typically measured by the rise in Gross Domestic Product (GDP).
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