What Is Stock Index Rebalancing, And Why Does It Matter For Traders?

Stocks

Economic

Summary:

Index rebalancing is a routine adjustment that helps keep stock market indices aligned with their intended structure.

Index rebalancing is a routine adjustment that helps keep stock market indices aligned with their intended structure. It affects stock weightings, trading volume, and market movements, creating both potential opportunities and risks for traders. In this article, we will explain index rebalancing, its impact on markets and CFDs, and what traders may consider when these adjustments take place.

What Is Index Rebalancing?

So what does rebalance mean in the context of an index? Index rebalancing is the process of adjusting the composition of an index to keep it aligned with its intended structure. Indices like the S&P 500, NASDAQ 100, and FTSE 100 follow specific rules about which companies are included, how they are weighted, and when adjustments take place. Rebalancing ensures an index continues to represent its target market or sector accurately.

The process typically involves adding or removing stocks and adjusting weightings based on factors like market capitalisation, sector representation, or liquidity. For example, if a company in the S&P 500 is acquired or no longer meets the inclusion criteria, it will be removed and replaced with another company. Similarly, if a benchmark is weighted by market cap, stocks that have significantly grown or declined in value may see their weightings adjusted.

Rebalancing occurs on a set schedule—often quarterly or semi-annually—although some indices may rebalance annually. For example, the S&P 500 rebalance dates fall each quarter in March, June, September, and December. In some cases, an index can be rebalanced more frequently if extreme market events necessitate adjustments. These changes have a direct impact on trading activity, as institutional investors and funds tracking the market must buy or sell shares to match the updated composition.

Why Do Indices Rebalance?

Indices rebalance to stay accurate, relevant, and aligned with their underlying rules. Without rebalancing, an index could drift away from what it’s supposed to represent, making it less useful for investors and traders. The adjustments ensure that changes in stock prices, market conditions, and corporate events don’t distort its structure.

Here are the main reasons indices rebalance:

● Market Capitalisation Changes: Many indices are weighted by market cap, meaning companies with larger valuations have more influence. If a stock surges in value, its weighting may exceed the index’s intended structure, requiring an adjustment. Similarly, if a stock declines sharply, it may lose weighting or be removed entirely.

● Company Additions and Removals: Stocks don’t stay in an index forever. Companies may be added or removed based on predefined criteria. For example, an S&P 500 rebalance will remove a company from the benchmark if it’s acquired or falls below the top 500 by market cap.

● Sector Adjustments: Some indices aim to maintain balanced exposure across industries. If one sector becomes overweight due to stock price movements, rebalancing helps redistribute weightings.

● Liquidity and Investability: Indices often remove stocks that become illiquid or difficult to trade, replacing them with more actively traded alternatives.

● Structural Rule Updates: Occasionally, a provider updates its methodology, adjusting how stocks are weighted or selected. These rule changes can trigger rebalancing to align with new criteria.

How Index Rebalancing May Affect Markets and CFDs

Index rebalancing isn’t just a routine adjustment—it can create waves across the market. When an index changes its composition, large funds tracking it have to buy and sell stocks to reflect the new weighting. This can contribute to short-term volatility and increased trading volumes. Notably, for CFD traders, rebalancing can affect prices, spreads, and liquidity.

How Index Rebalancing May Affect Markets

Let’s start by taking a look at how index rebalances may impact markets as a whole.

Increased Trading Volume and Volatility

When an index adds or removes stocks, institutional investors—including ETFs and index funds—adjust their portfolios to match. This results in sharp spikes in trading volume, particularly near the rebalancing date. For example, when the S&P 500 rebalanced in December 2020 to include Tesla, funds tracking the index had to buy billions of dollars worth of Tesla shares, sending prices soaring.Stocks being removed often experience the opposite effect—selling pressure from funds offloading shares can push prices down. These imbalances create volatility, which some traders analyse for their strategies.

Temporary Price Distortions

Rebalancing-driven buying and selling doesn’t always reflect a company’s fundamentals—it’s often purely mechanical. This can lead to short-term price distortions, where stocks being added to an index see an artificial boost, while those being removed decline, even if their business performance hasn’t changed.These movements are often most pronounced in smaller indices, such as the Russell 2000, where changes in weighting can have a larger impact due to lower liquidity.

Sector and Market-Wide Impacts

If multiple companies from a single sector are added or removed, it can influence broader sector trends. For example, if a rebalancing event shifts weightings toward tech stocks, the sector may see more attention from traders.Additionally, in major indices like the S&P 500, rebalancing can have ripple effects across global markets, as institutional capital moves in response.

How Index Rebalancing Affects CFDs

Many short-term traders interact with indices through CFDs. Rebalances can have a unique impact on these instruments too.

Impact on Index CFD Prices

Since index CFDs track the price movements of underlying indices, rebalancing can create sudden price swings. Traders holding CFD positions may need to consider rebalancing schedules, as components shifting in or out can impact the value of an index CFD.If a high-weighted stock is added, the index price may rise due to greater buying. Conversely, if large components are removed, selling pressure could push prices lower.

Spread Widening and Liquidity Changes

During rebalancing, spreads on index CFDs can widen as liquidity providers adjust to increased volatility. This can make trading conditions less favourable, especially around the official rebalancing execution. Some CFD providers may also update their pricing models to reflect the new composition, which could affect contract specifications.

Stock Trading

CFD traders who analyse rebalancing effects may find price spikes in newly added stocks or declines in those being removed. However, these moves can be short-lived, as markets often stabilise after the rebalancing is complete.

The Bottom Line

Index rebalancing plays a crucial role in maintaining the accuracy of market-tracking instruments, influencing price movements, volatility, and trading activity. By periodically adjusting the composition of an index to reflect market changes, rebalancing ensures that it continues to serve as an accurate benchmark for investors and traders. Understanding these adjustments can help them navigate market shifts.

FAQ

What Is Rebalancing of an Index?

Index rebalancing is the process of adjusting the assets within a market index to maintain its intended composition. This involves adding or removing assets and updating weightings based on factors like market capitalisation, liquidity, or sector representation. Rebalancing occurs on a set schedule, such as quarterly or semi-annually.

How Is the S&P 500 Rebalanced?

S&P 500 rebalancing occurs quarterly in March, June, September, and December. The index committee reviews companies based on market cap, liquidity, financial performance, and sector balance. If a company no longer meets the criteria, it is removed and replaced with a more suitable stock. These changes can influence stock prices due to large-scale institutional adjustments.

What Is the Index Rebalancing Strategy?

An index rebalance strategy involves analysing upcoming adjustments to anticipate potential price movements. Traders and investors track changes to identify stocks that may experience increased buying or selling pressure. Some strategies focus on stocks being added or removed, while others assess the broader market impact.

How Often Do ETFs Rebalance?

ETFs rebalance based on their underlying index, typically quarterly or semi-annually. More frequent ETF rebalancing is common in actively managed ETFs, necessary to adjust weightings, manage risk, or align with specific investment strategies.

Source: FXOpen

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Glendon

Cryptocurrency

Institutional investors continue to accumulate Bitcoin at an unprecedented pace. This demand has come through the treasury companies, which are on the rise, and through the Bitcoin ETFs, which are again on a daily net inflow streak.

Institutions Announce More Bitcoin Buys This Week

Bitcoin for Corporations data shows that treasury companies again bought Bitcoin between last week and this week. Strategy, the largest BTC treasury company, added 155 BTC to its treasury at an average price of $116,401 per BTC. This brings their total holdings to 628,946 BTC. Metaplanet, which was the first to replicate Strategy’s Bitcoin model, also bought more BTC.

The Japanese company announced that it bought 518 BTC for $61.4 million at an average price of $118,519 per Bitcoin. The company now holds 18,113 BTC, which it acquired for $1.85 billion at an average price of $101,911 per bitcoin. Furthermore, smaller treasury companies also added to their Bitcoin stack.

Canadian company Matador added 5 BTC to its treasury at an average price of $116,619 per Bitcoin. The company now holds 77.4 BTC and plans to hold 1,000 BTC by next year. The Smarter Web Company added 295 BTC to their treasury at an average price of $119,412. It now holds 2,395 BTC.

Bitcoin company FOLD announced that it holds 1,492 BTC as part of its Q2 results. The company has also secured $250 million equity purchase facility. Meanwhile, these companies continue to raise more capital, which they intend to use to buy BTC.

Michael Saylor’s Strategy had filed a $4.2 billion STRC offering at the beginning of the month. The company plans to use the net proceeds to buy more BTC. Metaplanet had also earlier announced a $5.4 billion raise, which it intends to use to expand its treasury. The company’s goal is to own 1% of the total Bitcoin supply.

Bitcoin ETFs Are Also Buying

SoSo Value data shows that the Bitcoin ETFs are also actively accumulating more BTC. These funds are on a five-day net inflow streak. During this period, they have bought just over $1 billion in BTC. Their best outing during this period was on August 8, when they took in $403.88 million.

Notably, these Bitcoin ETFs hold $155.02 billion in net assets, which represents 6.48% of Bitcoin’s total market cap. They have also recorded a net inflow of $54.67 billion since they launched last year. The inflows into these funds have continued to act as one of the catalysts for higher BTC prices and are expected to remain that way as the flagship crypto eyes new highs.

At the time of writing, the Bitcoin price is trading at around $119,300, up in the last 24 hours, according to data from CoinMarketCap.

BTC trading at $119,980 on the 1D chart | Source: BTCUSDT on Tradingview.com

Source: CoinGecko

Risk Warnings and Disclaimers

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Adam

Stocks

Global shares hit a record high and the dollar weakened on Wednesday as investors cheered mild inflation data, and expectations of a U.S. rate next month buoyed demand for riskier assets.

The MSCI All Country World Index of shares climbed for a second day and reached 951.74, an all-time high. Japan's Nikkei stock index, meanwhile, set a fresh peak for a second straight session.

European stocks advanced 0.5%, with German shares adding 0.6%. Defence stocks led the gains, up 1.2%.

U.S. inflation readings, which on Tuesday showed the consumer price index (CPI) rising slightly less than forecast in the year through July, indicated President Donald Trump's import tariffs had yet to filter down to consumer prices.

That helped Wall Street scale new heights, supported by increasing certainty that the Federal Reserve will cut interest rates next month.

"The fact that CPI was broadly as expected was met with relief, leading to equity gains and tighter credit spreads as investors became increasingly confident about another rate cut," Deutsche Bank analysts wrote.

Also boosting market optimism was Trump's signing of an executive order pausing triple-digit levies on Chinese imports for another 90 days.

The positive mood was set to spread to Wall Street, where a gauge of S&P 500 futures reached a record high, pointing to a 0.2% advance.

In Japan, a Reuters poll that tracks the Bank of Japan's quarterly business survey showed the Japanese manufacturers' sentiment index improved for a second straight month.

Another report showed Japan's wholesale inflation slowed in July, underscoring the central bank's view that upward price pressure from raw material costs will ease.

The Nikkei rose for the sixth straight day, breaking the 43,000 level for the first time and hitting a fresh record high.

Risk-sensitive cryptocurrency ether rose to an almost four-year high above $4,710.

FED CUT

The dollar index , which tracks the greenback against a basket of major peers, fell for a second day to its lowest in two weeks. It was last down 0.3% at 97.70.

The dollar lost 0.2% against the yen to 147.52 . The euro added 0.3% to $1.1711, after a 0.5% jump in the previous session.

Traders are pricing in a 98% chance of a Fed cut in September, up from about 57% a month ago, according to the CME FedWatch tool.

Investors had been on tenterhooks about the inflation data because it followed a surprisingly weak jobs report on August 1 and had the potential to stoke concerns about stagflation - when an economy suffers both high inflation and high unemployment.

Trump has nominated White House adviser Stephen Miran to temporarily fill a vacant board seat at the U.S. central bank, stirring up speculation about presidential interference in monetary policy.

And the White House said it was "the plan" that the Bureau of Labor Statistics would continue to publish its closely watched monthly employment report after Trump's pick to head the agency, E.J. Antoni, proposed suspending its release.

Speculation the labour report would be halted has "done the USD no favours and would have only incentivised foreign investors to review their hedging ratios on U.S. investments," Chris Weston, head of research at Pepperstone, said in a note.

In sovereign bond markets, German 30-year bond yields fell on Wednesday, retreating from the previous day's 14-year high sparked by uncertainty linked to Trump's efforts to end the war in Ukraine.

U.S. crude fell 0.2% to $62.99 a barrel.

Source: Reuters

Risk Warnings and Disclaimers

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Warren Takunda

Economic

The director of the agency that produces the nation’s jobs and inflation data is typically a mild-mannered technocrat, often with extensive experience in statistical agencies, with little public profile.

But like so much in President Donald Trump’s second administration, this time is different.

Trump has selected E.J. Antoni, chief economist at the conservative Heritage Foundation, to be the next commissioner at the Labor Department’s Bureau of Labor Statistics. Antoni’s nomination was quickly met with a cascade of criticism from other economists, from across the political spectrum.

His selection threatens to bring a new level of politicization to what for decades has been a nonpartisan agency widely accepted as a producer of reliable measures of the nation’s economic health. While many former Labor Department officials say it it unlikely Antoni will be able to distort or alter the data, particularly in the short run, he could change the currently dry-as-dust way it is presented.

Antoni was nominated by Trump after the BLS released a jobs report Aug. 1 that showed that hiring had weakened in July and was much lower in May and June than the agency had previously reported. Trump, without evidence, charged that the data had been “rigged” for political reasons and fired the then-BLS chair, Erika McEntarfer, much to the dismay of many within the agency.

Antoni has been a vocal critic of the government’s jobs data in frequent appearances on podcasts and cable TV. His partisan commentary is unusual for someone who may end up leading the BLS.

For instance, on Aug. 4 — a week before he was nominated — Antoni said in an interview on Fox News Digital that the Labor Department should stop publishing the monthly jobs reports until its data collection processes improve, and rely on quarterly data based on actual employment filings with state unemployment offices.

The monthly employment reports are probably the closest-watched economic data on Wall Street, and can frequently cause swings in stock prices.

When asked at Tuesday’s White House briefing whether the jobs report would continue to be released, press secretary Karoline Leavitt said the administration hoped it would be.

“I believe that is the plan and that’s the hope,” Leavitt said.

Leavitt also defended Antoni’s nomination, calling him an “economic expert” who has testified before Congress and adding that, “the president trusts him to lead this important department.”

Yet Antoni’s TV and podcast appearances have created more of a portrait of a conservative ideologue, instead of a careful economist who considers tradeoffs and prioritizes getting the math correct.

“There’s just nothing in his writing or his resume to suggest that he’s qualified for the position, besides that he is always manipulating the data to favor Trump in some way,” said Brian Albrecht, chief economist at the International Center for Law and Economics.

Antoni wrongly claimed in the last year of Biden’s presidency that the economy had been in recession since 2022; called on the entire Federal Reserve board to be fired for not earning a profit on its Treasury securities holdings; and posted a chart on social media that conflated timelines to suggest inflation was headed to 15%.

His argument that the U.S. was in a recession rested on a vastly exaggerated measure of housing inflation, based on newly-purchased home prices, to artificially make the nation’s gross domestic product appear smaller than it was.

“This is actually maybe the worst Antoni content I’ve seen yet,” Alan Cole of the center-right Tax Foundation said on social media, referring to his recession claim.

On a 2024 podcast, Antoni wanted to sunset Social Security payments for workers paying into the system, saying that “you’ll need a generation of people who pay Social Security taxes but never actually receive any of those benefits.” As head of the BLS, Antoni would oversee the release of the consumer price index by which Social Security payments are adjusted for inflation.

Many economists share, to some degree, Antoni’s concerns that the government’s jobs data has flaws and is threatened by trends such as declining response rates to its surveys. The drop has made the jobs figures more volatile, though not necessarily less accurate over time.

“The stock market moves clearly based on these job numbers, and so people with skin in the game think it’s telling them something about the future of their investments,” Albrecht said. “Could it be improved? Absolutely.”

Katharine Abraham, an economist at the University of Maryland who was BLS Commissioner under President Bill Clinton, said updating the jobs report’s methods would require at least some initial investment.

The government could use more modern data sources, she said, such as figures from payroll processing companies, and fill in gaps with surveys.

“There’s an inconsistency between saying you want higher response rates and you want to spend less money,” she said, referring to the administration’s proposals to cut BLS funding.

Still, Abraham and other former BLS commissioners don’t think Antoni, if confirmed, would be able to alter the figures. He could push for changes in the monthly press release and seek to portray the numbers in a more positive light.

William Beach, who was appointed BLS commissioner by Trump in his first term and also served under Biden, said he is confident that BLS procedures are strong enough to prevent political meddling. He said he didn’t see the figures himself until two days before publication when he served as commissioner.

“The commissioner does not affect the numbers,’’ Beach said. “They don’t collect the data. They don’t massage the data. They don’t organize it.”

Regarding the odds of rigging the numbers, Beach said, “I wouldn’t put it at complete zero, but I’d put it pretty close to zero.’’

It took about six months after McEntarfer was nominated in July 2023 for her to be approved. Antoni will likely face stiff opposition from Democrats, but that may not be enough to derail his appointment.

Sen. Patty Murray, a senior Democrat from Washington, on Tuesday slammed Antoni as “an unqualified right-wing extremist” and demanded that the GOP chairman of the Senate Health, Education, Labor and Pensions Committee, Sen. Bill Cassidy of Louisiana, hold a confirmation hearing for him.

Source: AP

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Michelle

Commodity

Oil prices continued to edge lower this morning following a triangle breakout which could lead to a potential $12 move to the downside.

The International Energy Agency (IEA) announced on Wednesday that it expects oil supply to grow more this year but has reduced its forecast for demand because of weak fuel usage in major economies.

This comes a day after OPEC + released their monthly report yesterday. The OPEC + report saw the group raise its global oil demand forecast in a move that contradicts the IEA forecast today. Thesis is not a surprise as we have seen this diverging outlooks between the two organizations over the last few years.

The International Energy Agency (IEA) has updated its oil market forecasts with several key highlights. Global oil supply is now expected to increase by 2.5 million barrels per day (bpd) in 2025, higher than the previous forecast of a 2.1 million bpd rise, following the latest production hike by OPEC+. In August, global crude oil refining is projected to reach nearly a record high of 85.6 million bpd.

However, the IEA has slightly lowered its demand growth forecasts. The average oil demand growth for 2026 has been revised down to 700,000 bpd from the earlier estimate of 720,000 bpd. Similarly, the 2025 oil demand growth forecast has been trimmed to 680,000 bpd, compared to the previous projection of 700,000 bpd.

Trump-Putin Meeting to Serve as a Catalyst?

The White House said Tuesday that Friday’s Alaska meeting between US President Donald Trump and Russian President Vladimir Putin is meant to be a “listening session” for the president, lowering hopes for a quick Russia-Ukraine ceasefire agreement.

Market participants are already eyeing positive developments from the meeting but either way the meeting could be a catalyst for Oil prices.

Key challenges remain before the talks. Trump has suggested that both sides may need to give up land to end the three-and-a-half-year conflict. A resolution could ease some of the sanction concerns affecting the market. Meanwhile, oil prices have fallen, even though US inflation data yesterday strengthened expectations that the Federal Reserve will cut interest rates in September.

Looking Ahead

Oil prices are edging lower ahead of the Trump-Putin meeting which could dominate Oil price moves the rest of this week.

Risk-On sentiment has returned and yet Oil prices continue to struggle. Later in the day we will get another look at inventories data after API numbers were released yesterday.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Technical Analysis – WTI

From a technical analysis standpoint, Oil has broken below the triangle pattern and the 200-day MA resting around the 64.73 handle.

The breakout could lead to a long term drop toward the $52 a barrel mark based on the technical setup in play.

The RSI period-14 has yet to enter oversold territory, which hints that further downside could materialize in the days ahead.

Immediate support rests at 60.77 before the psychological 60.00 handle comes into focus.

Looking at the upside, resistance rests at 64.00 before the confluence level around the 64.73 handle comes into focus. Acceptance above this level, a move beyond the 65.00 handle could come into play.

WTI Oil Daily Chart, August 13, 2025

Source: TradingView (click to enlarge)

Source: ACTIONFOREX

Risk Warnings and Disclaimers

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Adam

Economic

U.S. stock futures climb on Wednesday, suggesting more gains ahead for Wall Street after tepid inflation data drove the S&P 500 and Nasdaq Composite to all-time closing peaks. Cisco Systems (NASDAQ:CSCO) is due to report, with analysts keeping their eyes peeled for the network equipment provider’s outlook for its 2026 fiscal year. Elsewhere, Perplexity AI offers $34.5 billion to buy Google’s Chrome browser.

Futures rise

Futures contracts linked to the largest U.S. indices rose, pointing to an extension in gains logged in the prior session that were fueled by muted inflation figures.

By 03:36 ET (07:36 GMT), the S&P 500 futures contract had advanced by 33 points, or 0.5%, and Nasdaq 100 futures had climbed by 264 points, or 1.1%, and Dow futures had gained 49 points, or 0.1%.

All three of the major averages on Wall Street rallied by more than 1% on Tuesday, spurred on by data showing that headline year-over-year consumer price growth in July matched the preceding month. The numbers bolstered wagers that the Federal Reserve will cut interest rates at its upcoming meeting next month, with officials at the central bank seen opting to prioritize supporting a flagging labor market over still above-target price gains.

"Inflation was broadly in line with expectations as tariffs continue to be largely absorbed within U.S. corporate profit margins. This gives the Fed the room to respond to the weaker jobs backdrop," analysts at ING said in a note.

Both the benchmark S&P 500 and tech-heavy Nasdaq notched fresh record closing highs, while yields on short-dated U.S. Treasuries -- which are particularly sensitive to rate expectations -- dipped. Yields tend to move inversely to prices.

Cisco to report

On the earnings calendar, Cisco Systems is set to kick off a string of releases from companies whose reporting quarter finished at the end of July.

The results, due out after the closing bell, are anticipated to beat expectations thanks partially to "general strength" in Cisco’s firewalls business and cybersecurity subscribers, according to analysts at Piper Sandler.

"Cisco is still experiencing net-momentum into the second half, with early networking prints a good signal for the space and 2026 likely a good refresh period," the analysts led by James Fish wrote.

They added that Cisco’s fiscal year 2026 guidance will be "key," particularly after Mark Patterson replaced Scott Herren as the firm’s finance chief. Herren, who retired in July, is leaving after Cisco raised its fiscal 2025 results outlook, banking on artificial intelligence helping to sustain demand from cloud customers for its networking equipment.

Observers also noted that the contribution of Splunk (NASDAQ:SPLK), the cybersecurity group Cisco bought for $28 billion in 2024, will now be folded into the company’s organic numbers. The transaction was the largest in Cisco’s history and reflected a push to more deeply integrate AI into its operations.

Perplexity’s $34.5 bn bid for Google’s Chrome

Perplexity AI has put forward a $34.5 billion unsolicited all-cash offer to buy Alphabet-owned Google’s Chrome brower, marking a push by the startup to harness the data needed to train its AI model from the service’s billions of users.

The news comes as Google faces a legal battle over antitrust concerns surrounding its all-important search business.

Last year, a U.S. judge ruled that Google had spent billion of dollars to illegally create a monopoly that made it the world’s dominant search engine. The decision cleared the way for a number of potential fixes, including the breaking up of Alphabet (NASDAQ:GOOGL) through a sale of Chrome. Such a move could fundamentally alter the world of online advertising that has long been a centerpiece of Google’s operations.

Perplexity, which previously submitted a bid for TikTok US as the short-form video app dealt with concerns in Washington around its Chinese ownership, did not disclose how it plans to fund its bid. The firm was last valued at $14 billion, and has raised roughly $1 billion in backing from investors like SoftBank (TYO:9984) and Nvidia (NASDAQ:NVDA).

Ether near all-time peak

Bitcoin gained slightly, while Ether hovered around record highs as cryptocurrency markets rallied on the mild U.S. consumer inflation data.

Ether also surged amid a flurry of buying as corporate entities stockpile the world no. 2 cryptocurrency in a manner similar to Bitcoin. The digital token rose as much as 8.5% to $4,683.0, coming within touching distance of a $4,861 record high hit in November 2021.

Several U.S.-listed companies outlined plans to increase their Ether holdings this week amid growing adoption of a Bitcoin buying strategy popularized by Michael Saylor’s Strategy.

The world’s biggest corporate Bitcoin holder, Strategy has raised billions of dollars through share issuances, which it has then largely used to fund Bitcoin purchases over the last two years.

Gold inches higher

Gold prices pushed up in early European trading, supported by hopes for Fed policy easing, while investors also looked ahead to U.S.-Russia talks due later this week.

Spot gold had risen by 0.3% to $3,359.54 an ounce, while gold futures for December climbed by 0.3% to $3,408.22/oz by 03:35 ET.

Following Tuesday’s muted inflation figures, markets are now pricing in a more than 96% probability of a September cut, according to CME’s FedWatch Tool. Lower interest rates reduce the opportunity cost of holding non-yielding assets such as gold, making bullion more attractive to investors.

However, gold’s advance was tempered by geopolitical developments, with traders closely watching Friday’s summit between U.S. President Donald Trump and Russian President Vladimir Putin in Alaska.

The meeting will focus on the war in Ukraine, and market participants are weighing the possibility of proposals for a ceasefire.

Source: investing

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Samantha Luan

Economic

Stocks

Forex

Key points:

● MSCI EM stocks up 1.7%, FX up 0.3%

● Zelenskiy, European leaders to speak to Trump ahead of Alaska summit

● Thailand cuts interest rates by 25 bps

Emerging market equities jumped on Wednesday, lifting a key stocks gauge to its highest in nearly four years on hopes the Federal Reserve will trim rates next month.The MSCI global EM equity gaugeCBOE:EFSjumped 1.7%, hitting its highest since Nov. 2021, helped by strong gains in Asian stocks. A similar gauge for currencies edged up 0.3%.

Hong Kong's Hang Seng Indexjumped 2.6%, logging its strongest intraday performance in over three months. South Koreanrose 1.1%, while Indonesian equitiesrose to their highest in nearly 11 months.Thai stocksjumped 1.6% after the central bank cut interest rates by 25 basis points, as expected. The bahtgained marginally.Emerging market currencies rose at the expense of the dollaras Tuesday's tame U.S. inflation data and a recent dismal jobs report cemented expectations of a U.S. interest rate cut next month.

CME FedWatch now pegs the probability of a September cut at 97%, up from about 86% a day earlier and just 57% a month ago."Markets were reassured because the tariff impact on inflation didn't look so obvious this time," Deutsche Bank analysts said in a note.Momentum in central and eastern European stocks and currencies was subdued compared to Asia. Equities in Polandslipped 0.3%, while Romania's stocksinched up 0.4%.

Czech'sand Hungary'sbenchmark indexes held steady.

Markets tracked Wednesday's virtual sit‑down between European and Ukrainian leaders and U.S. President Donald Trump before the latter's summit with Russian President Vladimir Putin in Alaska on Friday.The unpredictability of how the summit will play out has fanned European jitters that the two leaders could cut sweeping deals, or strong‑arm Ukraine into accepting a deal that forces it to surrender a significant amount of land.Ukraine's international dollar bonds slipped for the second day."The market seems to be lowering its expectations for the outcome of Friday's talks," said Frantisek Taborsky

EMEA FX & FI Strategist at ING.

"It seems that the market has slightly overestimated the outcome, and the risk is becoming more symmetrical again, but still biased towards losses in case of a collapse in negotiations."Meanwhile, South African equitiesjumped 1.1% to a record high, while the randgained 0.3% JPMorgan said on Tuesday the recently imposed 30% U.S. tariffs on South African exports are expected to have a limited effect on the country's assets, as markets have "largely priced in the reality of higher tariff headwinds".The country's business confidence and retail sales figures are due later in the day.Elsewhere, stocks in Israeljumped 1.8%, recovering from a steep fall in the previous session.