Stock Markets: From Tokyo to New York, stock markets around the world are seeing record gains.

If there’s one similarity between global stock markets, from New York to London to Tokyo, it’s all-time highs. Fourteen of the world’s top 20 stock markets recently hit record highs. The MSCI ACWI index, which tracks developed and emerging markets, posted record gains on Friday, hitting another record high. In the United States, the S&P 500 and Nasdaq 100 reached record highs this week, and the Dow Jones Industrial Average exceeded 40,000 for the first time. Meanwhile, the largest stock exchanges in Europe, Canada, Brazil, India, Japan and Australia are currently at or close to peaking.

Upcoming interest rate cuts, a healthy economy, and corporate profits are driving this activity. Moreover, while risks remain slim, there are plenty of potential drivers that could keep the rally going, including $6 trillion sitting in money market funds. “From a macro perspective, there are no red flags,” said Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, whose multi-asset portfolio overweights global stocks. “The cyclical picture remains strong and the rally is expanding.” In April, the global stock market’s downtrend did not last long as bearish buying continued. This helps explain why the S&P 500 hasn’t seen a 2% decline in 311 days, its longest streak since 2017-2018. And even Chinese stocks, which had been struggling since hitting record highs in February 2021, have begun to rebound.

With all this in mind, here’s what’s happening in major stock markets around the world.

$12 trillion rally
The S&P 500 has hit 24 new all-time highs since the end of October 2024, following a $12 trillion rally in U.S. stocks, following two years of all-time highs. One is hopes for a soft landing with the economy remaining strong while inflation cools, spurring bets that the Federal Reserve will ease monetary policy as early as the end of the year.

Another part is passion for artificial intelligence technology. AI chip giant Nvidia Corp. itself is responsible for about a quarter of the S&P 500’s rise. and Microsoft Corp., Amazon.com Inc., and Meta Platforms Inc. and Google’s parent company, Alphabet Inc., at about 53rd place. % of the benchmark’s gain comes from just 5 stocks.

Perhaps the Dow’s new milestone this week is a more significant development, according to Dave Mazza, CEO of Roundhill Investments. That’s because the Dow has less exposure to big tech companies.

“The strength of the technology sector is critical for the market to continue to rise, but it is far from the only sector doing well,” he said. “Some people pointed out that the market was too concentrated last year, but the same cannot be said for 2024.”

Earnings Surprises in Europe
In a positive surprise this year, European stock markets are also posting record gains as economic indicators show signs of bottoming out. This is boosting corporate profits and raising expectations that the market will continue its upward trajectory.

“The anticipated weak performance season turned out to be better than feared,” said BNP Paribas strategist Georges Debbas, noting that three-quarters of European companies met or exceeded earnings expectations and margins also improved. did. This drives analyst estimates of future profits, driving up stock prices.

The pan-European Stoxx 600 index has risen in five of the past six months, with US monetary policy differences likely to be a tailwind for stocks in the region. The European Central Bank (ECB) has taken a more dovish stance than the Federal Reserve over the past few months, and bond markets are expecting the ECB to cut interest rates before the United States for the first time.

The rally has been largely concentrated in a handful of stocks, but has expanded since February, with 16 stocks accounting for 50% of the Stoxx 600’s year-to-date gains. Novo Nordisk A/S is the largest, accounting for 10% of total shares. Gauge’s returns this year were 7.7% and 4.3% for ASML Holding NV and SAP SE, respectively.

raw material lift stocks
Britain’s FTSE 100 index has outperformed the Euro Stoxx 50 in dollar terms over the past three months, recovering much of its underperformance from the start of the year. Soaring commodity prices have become a key driver, with one of the world’s cheapest developed stock markets starting to catch up with its rivals.

The economically sensitive commodities sector also pushed Canada’s main stock benchmark, the S&P/TSX Composite Index, to record highs. Gold and copper have continued to set records this year, giving a boost to the country’s large mining sector, which accounts for more than 12% of the index’s weight.

“With precious metals prices approaching 10-year highs set just a few weeks ago, Canadian indexes may find support for the time being, but a reversal could spell trouble,” said Bloomberg Intelligence analysts Gillian Wolff and Gina Martin Adams. “It can be done,” he said.

Japan is back
Japan’s Nikkei 225 index is up 16% this year and 28% last year. Japan has lured investors and generated profits through a campaign to improve shareholder returns, a weaker yen and the end of Japan’s negative interest rates.

Strategists at BlackRock Inc. said a weaker yen could attract the attention of foreign investors. But they also think the long-term outlook is good due to corporate reforms, domestic investment and wage growth.

India is also showing strength, with the benchmark S&P BSE Sensex setting a record and outperforming China, driven by government investment commitments and economic expansion. But investors have become cautious in recent weeks due to election uncertainty and high valuations.

Meanwhile, Australia’s S&P/ASX 200 index hit a record high on March 28 as inflation data supported expectations that interest rates had peaked. Since then, expectations have changed, with a former central bank official predicting a cut would not be possible until late 2025. But Australian stocks are hovering near record highs again.