What’s moving markets now isn’t just another rally — it’s the unmistakable shift of a dovish tide, the kind that doesn’t rise in isolation but swells across oceans, lifting virtually every boat in every harbour. The trigger on both sides of the Pacific has been the same: steady U.S. data paired with a labour market finally showing signs of fracture.
Together, they’ve handed Powell’s Fed the policy cover to act, and traders are already front-running the prospect of three cuts in 2025 as if it were a fait accompli.
Wall Street has embraced the script. The and both closed at fresh record highs, and MSCI Asia surged in step, pushing toward its own peak. This isn’t idiosyncratic — it’s the synchronized rhythm of global liquidity turning. Inflation was calm enough to quiet hawks, but at a four-year high reminded everyone that the real stress point is employment, not prices.
Big Tech remains the convoy leader. Microsoft (NASDAQ:) patched up its OpenAI partnership, Adobe (NASDAQ:) raised guidance, and Alibaba’s (NYSE:) U.S. shares surged 8%, setting up Hong Kong to follow. These aren’t just sparks — they are proof that the AI capex juggernaut is still the locomotive dragging benchmarks forward. In a liquidity tide, capital always rushes first to the same names, forcing even the doubters to chase.
Rates markets are trading in lockstep with that dovish narrative. Treasuries held Thursday’s gains with the steady, and yields shadowed lower, and swaps now price two to three cuts by year-end. But the sequencing is where traders are really leaning.
A 25-point cut next week looks baked in, yet markets are already gaming whether a 50-pointer could appear further down the road if jobs data really caves. At the same time, if doesn’t crack lower, the easing cycle could end up tinier than the curve currently discounts.
That’s the next razor’s edge traders sit on: the tide gate is open, but the size of the swell depends entirely on how fast the labour market breaks. And I do believe that is what the broad is waiting on — the subsequent definitive fracture in U.S. employment before it commits to its next significant directional move.
Powell’s first cut is imminent, and the real debate isn’t whether it comes, but how far and how fast the tide rolls.
That’s why this moment feels so global. When the Fed shifts dovish, correlations tighten, and markets don’t just rise in one place — they lift everywhere, all at once. Traders can argue valuations, question oil’s slide, or parse whether labour weakness turns recessionary. But those are secondary debates. The here and now is clear: a dovish Fed has set the tide in motion, and virtually every boat in every harbour is already being carried with it.