Global stock markets hit record highs on Tuesday as investors bet on falling interest rates and renewed optimism over global growth – with Apple reaching a $4 trillion market valuation for the first time.
The FTSE 100 touched an intra-day record of 9,715.22, before trading slightly lower and rising 0.5% to 9,698.4, while all three major US indexes – the S&P 500, the Nasdaq and the Dow Jones Industrial Average – also opened at all-time highs, rising between 0.3% and 0.7%.
The broad-based rally reflects growing confidence that the U.S. Federal Reserve will cut interest rates at the conclusion of its two-day policy meeting on Wednesday, a key moment for markets after nearly two years of monetary policy tightening.
Apple shares rose 1% to $269.86, taking its total market capitalization to just above $4 trillion and cementing its position as the world's most valuable listed company.
The rally has been boosted by strong sales of the company's latest iPhone lineup as well as investor confidence in its ability to maintain premium margins through its services, wearables and AI-powered ecosystem.
Apple's increase comes just days before its quarterly earnings report on Thursday, which investors hope will confirm continued growth in hardware sales and continued expansion in its subscription services division.
“Apple remains the gold standard in consumer technology and profitability,” said Anita Sharma, senior technology analyst at Horizon Partners. “Breaking the $4 trillion mark isn't just symbolic – it underscores the market's confidence in Apple's ability to monetize its ecosystem even in a slowing global economy.”
Apple's nearest rival by market capitalization, Microsoft, regained the top spot earlier this week with a valuation of $4.06 trillion, fueled by optimism ahead of its earnings release tomorrow. The company's investments in AI through OpenAI and its Azure cloud platform are driving investor enthusiasm.
Both tech giants have traded frequently this year, reflecting how leadership in the emerging AI and cloud computing races now defines investor sentiment in global markets.
Meanwhile, other major technology names – including Alphabet (Google), Amazon and Meta Platform – are also due to report results this week, setting the stage for one of the most consequential earnings seasons ever for the “Magnificent Seven” tech stocks.
Beyond the technology sector, global equities improved on hopes of improving trade relations and loose monetary policy in the US and Europe.
Recent data suggesting easing inflation has encouraged investors to move back into riskier assets, including growth-oriented sectors such as technology, industrial and consumer discretionary stocks.
“The combination of softening inflation, soft bond yields and central bank caution is creating a sweet spot for equities,” said Chris Weston, head of research at Pepperstone. “Markets are now expecting a 25-basis-point rate cut from the Fed – and perhaps two more by the end of the year.”
In London, the FTSE 100 climbed to 9,715.22, a historic high for the index, led by strong performances from AstraZeneca and HSBC, as well as gains in energy, banking and mining shares.
Sterling held steady at $1.28 against the dollar, helping exporters on the index, while bond yields fell slightly amid speculation that the Bank of England could follow the Fed's lead with a rate cut as early as 2026.
Global optimism swept European markets, with Germany's DAX and France's CAC 40 also trading near record levels, analysts said.
Attention now turns to Federal Reserve Chairman Jerome Powell, who will deliver the central bank's policy statement and outlook on Wednesday. The market widely expects the first rate cut after 2023, potentially signaling the start of a more accommodative cycle.
US inflation has moved back towards the 2% target, while growth remains resilient – factors that investors see as supporting equities and risk assets.
However, analysts warn that valuations in tech-heavy indices are “overstretched”, with much of the year's rally dependent on continued earnings growth from a narrow band of mega-cap companies.
“We are at a tipping point,” said David Blanchflower, a former Bank of England policymaker. “If central banks can make a soft landing, these levels could hold – but any aggressive surprises from the Fed will test market confidence.”
The record valuations of Apple and Microsoft have reignited the debate over concentration of market power among US tech giants. The top five companies – Apple, Microsoft, Alphabet, Amazon and Nvidia – now account for nearly 30% of the S&P 500's total market value, an unprecedented level since the dotcom boom.
Still, investors remain relaxed, viewing the dominance of AI-focused technology stocks as a long-term structural trend rather than a speculative bubble.
As Wall Street enters new territory, one thing is clear: The trillion-dollar titans of the markets are once again defining the next phase of the global bull market.
jamie young
Jamie is a senior reporter at Business Matters, with over a decade of experience in UK SME business reporting. Jamie has a degree in Business Administration and regularly attends industry conferences and workshops. When Jamie is not reporting on the latest business developments, he is passionate about mentoring budding journalists and entrepreneurs to inspire the next generation of business leaders.
