LONDON — Stocks around the world extended a four-day rally on Wednesday across Wall Street, Europe, and Asia as investors rushed into trades linked to expectations that the Fed would cut rates. The rally has lifted everything from mega-cap tech to emerging-market currencies, but is slamming up against expanding strains in China’s property market and new attention on the yen, Nov. 27, 2025.
Bets on a rate cut drive global stocks
Stocks extended their winning streak to a fourth day on Friday as traders piled into bets that the Fed will cut rates at its December Federal Open Market Committee meeting. Shares in Asia followed Wall Street into positive territory, with regional indexes generally higher and Japan’s Nikkei up by 1 percent or more, as rate-sensitive sectors led the way, according to trade data compiled by Reuters.
Derivatives markets now imply roughly an 80-85 percent probability of another 25 basis-point Fed rate cut at the Dec. 9-10 meeting, a significant shift from about 30 percent just one week ago, a market move highlighted in recent analysis from Nasdaq. Softer U.S. data, plunging bond yields, and dovish comments from Fed officials are prompting investors to regain exposure to growth stocks and higher-yielding credit,” strategists said.
Markets have been here before. A Fed pause in November 2023 also sparked a strong year-end rally before growth fears reared their head again, and strategists had visions of a “Fed pivot” ending the bear market as early as late 2022. And it is helping to drive debate over whether the latest bout of Fed rate cut excitement represents a durable trend or just another transient “everything rally.
Yen vigilance vs Fed rate cut fiction
And currency traders are much less excited. The dollar weakened, and the yen firmed to above mid-150s per dollar, dragging the pair into uncomfortably close territory for Tokyo in historical terms, prompting direct intervention. Satsuki Katayama, the finance minister, reiterated that currency intervention was an option. At the same time, Bank of Japan officials suggested they may raise rates as soon as next month, according to a recent Reuters report.
That caution is based on hard-earned experience: Japan had to snap up yen hand over fist the last time authorities intervened outright, in October 2022, but too little and way too late, at a 32-year low near 152 per dollar. Policy makers now confront a balancing act: supporting growth with loose policy while not triggering another destabilizing nosedive in the yen that would suck in imported inflation and roil global bond markets.
Vanke delay shakes China, Bitcoin follows Fed rate cut trade
In China, the day’s risk-on mood was tempered by renewed stress in its property sector. The Chinese state-owned developer China Vanke called on bondholders to agree to postpone repayment of 2 billion yuan on its onshore note maturing next month, causing several of its yuan bonds to fall by over 20 percent and pushing a major real estate index to a one-year low, reported Reuters. The move has revived questions about how much Beijing and local governments are willing to intervene, even for the most championed builders, amid the multiyear housing slump.
Crypto markets, on the other hand, are increasingly trading as a leveraged expression of the Fed rate-cut story. Bitcoin, which had recently fallen to the $80,000 region during a violent liquidation phase, is already bouncing back towards $90,000 as December easing becomes a matter of when and how, the report noted in an overview from MEXC’s research team. A weaker dollar and lower real yields reduce the opportunity cost of holding non-yielding metal, like Bitcoin, so they are logical beneficiaries when rate cut expectations from the Fed go up,” analysts said.
For now, that brew of Fed rate-cut expectations, yen vigilance, and China’s property strains is shaping the late-year outlook for risk assets. Strategists say the global rally could still broaden if the Fed follows through on another rate cut, Japan continues to tread lightly to contain currency volatility, and Beijing finds a way to control the downstream fallout from Vanke. But any hawkish steer from the Fed, a surprise yen intervention, or an escalation in China’s debt woes would quickly unravel the optimism driving today’s Fed rate-cut trade.
