Global stocks rise as investors eye Fed revamp; gold hits record

Global shares rose on Friday, along with the dollar, as investors clung to the view that US interest rates may fall further this year, while gold futures rallied on a report of duties on US imports of bullion bars.

An index of world stocks traded near record highs, shrugging off weakness on Wall Street overnight, and in Europe, shares got a lift from a series of robust earnings and from optimism that the hefty US tariffs that kicked in on Thursday would be subject to negotiation.

The outlook for monetary policy in the United States, a linchpin for global markets, has become even more open to question due to a series of changes at the Federal Reserve, where policymakers are divided on the impact of inflation and the central bank's leadership is shifting.

US President Donald Trump said on Thursday he would nominate Council of Economic Advisers Chairman Stephen Miran to fill a vacant seat at the Fed for a few months while the White House seeks a permanent addition to the central bank's governing board and continues its search for a new chair.

Miran holds similar views to Trump, who has berated Chair Jerome Powell for being "too late" in cutting interest rates, even though growth is holding up and inflation is ticking higher.

"It locks in a vote for rate cuts at all the meetings between now and the end of January," said Ray Attrill, head of FX strategy at National Australia Bank in Sydney.

"Markets are already travelling with a very strong expectation that there will be a rate cut," he added. "Though there's a question mark over whether he'll succeed in ratification in time for the September meeting."

The MSCI All-Country index was up 0.1% on the day, just below record highs struck two weeks ago, and was heading for a 2% rise this week, its best performance since mid-June.

Europe's STOXX 600 was up 0.2%. Zurich's SMI index , which on Thursday shrugged off Switzerland's 39% US tariff coming into effect, eased 0.14%.

The market is also digesting a Bloomberg News report that Fed Governor Christopher Waller is the top candidate to replace Powell, whose term ends on May 15, 2026.

"The effective shock (from tariffs) is there. So the question now is: How is it going to impact the economy and the data, and when? Because up to now, up to now, let's be fair, it's been less severe than most have anticipated," Lombard Odier economist Samy Chaar said.

Overall tariffs may be lower than many had feared back in April, but they are at their highest in at least a century.

Relief over lower-than-expected duties may be short-lived as a result. A case in point would be the European Union, which now has a 15% tariff, rather than the 50% that Trump had threatened, Chaar said.

"That's the vulnerability in the market ... it is focusing on the good news, which is not getting the 50%, but getting the 15%. And then the problem is that 15% is actually a big shock and, at some point, it's going to show in the data," he said.

US gold futures hit a record high after a report in the Financial Times that the US had imposed tariffs on imports of 1-kg gold bars, which comprise the bulk of Switzerland's bullion exports to the US, citing a letter from Customs and Border Protection.

Spot gold edged up 0.1% to $3,400 an ounce, while gold futures rose as much as 2.3% to an all-time peak of $3,477.

US stock futures were both up 0.2%, pointing to a modest rise at the opening bell later.

The rally for stocks comes "against the backdrop of an emerging titanic dovish pivot at the Federal Reserve", said Tony Sycamore, market analyst at IG in Sydney.

The yield on benchmark 10-year Treasury notes rose to 4.2442%, unchanged from the US close on Thursday, after weak demand at an auction of 30-year bonds, the latest in a string of lacklustre sales this week.

The dollar rose 0.1% against the yen to 147.24.

The euro dipped 0.2% to $1.1648, having gained 2.13% in a month, while the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was up 0.2% at 98.21.

Oil prices steadied on Friday and were poised for the steepest weekly losses since late June on a tariff-hit economic outlook and a potential meeting between US President Donald Trump and Russian counterpart Vladimir Putin.

Brent crude futures were up 14 cents, or 0.2%, at $66.57 a barrel by 1316 GMT. US West Texas Intermediate crude futures rose 4 cents, or 0.1%, to $63.92.

Brent was on track to be down 4.4% over the week while WTI was set to finish 4.9% lower than last Friday's close.

Higher US tariffs on imports from a host of trade partners went into effect on Thursday, raising concern over economic activity and demand for crude oil, ANZ Bank analysts said in a note.

The latest tariffs arrive against a backdrop of an already weaker than expected US labour market and Thursday's announcement by the Kremlin that Putin and Trump would meet in the coming days as trade tensions rise between the US and Russia's oil customers.

Trump this week threatened to increase tariffs on India if it kept buying Russian oil, which the market viewed as putting further pressure on Russia to reach a deal with the US, said independent analyst Tina Teng.

Trump also said China, the largest buyer of Russian crude, could be hit with tariffs similar to those levied against Indian imports.

The potential meeting raises expectations of a diplomatic end to the war in Ukraine, which could lead to eased sanctions on Russia, with Russian stocks rallying after the news.

"There could be a meeting between Trump and Putin in the near future, which could indicate that Trump is adopting a wait-and-see approach with regard to further sanctions against Russia and its allies," Commerzbank analysts said in a note.

However, some analysts remain cautious.

"The Russian leader is expected to insist on having his territorial demands granted, a hard sell for the invaded country, while his US counterpart will push for a ceasefire," said PVM analyst Tamas Varga.

"No breakthrough is anticipated, and the US following through on its threat to impose secondary sanctions on those dealing in Russian energy - including China and India - remains a possibility."

Agencies