Global stocks post weekly gains after strong US earnings season

Cryptocurrency market surges amid hopes of regulations being eased by incoming US administration

Traders on the floor of the New York Stock Exchange. Reuters

Global stocks posted weekly gains on Friday after a stronger-than-expected US earnings season, while US Treasury yields fell in anticipation of president-elect Donald Trump's economic policies.

Mr Trump is expected to implement a more protectionist trade agenda when he takes office in January. The president-elect has suggested issuing a 10 to 20 per cent tariff on all imports, as well as a 60 per cent tariffs on imports from China.

On Friday, Mr Trump nominated Scott Bessent to lead the US Treasury, considered to be the president-elect's most consequential economic pick. Mr Bessent, who founded the macro hedge fund Key Square Group in 2015, served as a key economic adviser to Mr Trump during the campaign.

The earnings season in the US has come to an end with a stronger-than-expected performance for most S&P 500 stocks. Eight of the 11 sectors on the index posted earnings growth, showcasing “broad resilience” despite macroeconomic challenges, Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, said in a research note.

“The numbers didn’t point at any type of economic distress in the US and maintained the soft-landing narrative – also supported by broader macroeconomic data – well alive,” Ms Ozkardeskaya said.

However, she added that while strong economic growth benefits businesses, it can also contribute to inflation, which is not ideal for reducing interest rates.

“Add to that Trump’s plans to cut taxes and impose tariffs on China and other partners, the inflation outlook doesn’t look supportive of sustained rate cuts from the Federal Reserve.”

The yield on the 10-year US Treasury bond dipped slightly to 4.412 per cent as markets reassessed their expectations on future rate cuts.

However, cryptocurrency market surged this week on traders’ hopes that a Trump-led administration would ease regulations.

Bitcoin, the world’s largest cryptocurrency, was trading at $98,346.47 after reaching an all-time high of $99,299 on Friday.

On Wall Street, the Dow closed nearly 1 per cent higher on Friday. The benchmark S&P 500 added 0.35 per cent, while the tech-heavy Nasdaq Composite rose 0.16 per cent. Europe's Stoxx 600 index settled 1.2 per cent higher.

In Asia, Tokyo’s Nikkei 225 index settled 0.68 per cent higher, while the Korea Composite Stock Price Index recorded a gain of 0.83 per cent. Taiwan's Taiex ended the day 1.6 per cent higher.

Meanwhile, Hong Kong’s Hang Seng closed nearly 2 per cent lower, while the Shanghai Composite Index fell by 3.1 per cent amid the growing threat of US tariffs on Chinese goods.