Stock markets worldwide posted sharp gains November 11, 2025, as Federal Reserve Bank of San Francisco President Mary Daly said tariff effects "have largely been confined to goods, with little spillover into services inflation" and inflation expectations remain "well-anchored around our 2% target."
Daly warned against "holding on too long to high interest rates only to find out we've injured the economy," citing a "labor market that's softening and wage growth that is moderating." The remarks eased concerns about aggressive Fed tightening, triggering gains across American, European, and Asian bourses.
A bipartisan U.S. government funding agreement backed by the White House further reduced political risk. The dual catalysts drove technology stocks higher, with AI semiconductor manufacturers leading the advance across markets from New York to Frankfurt to Tokyo.
The rally contrasted with earlier 2025 volatility when investors feared tariff-driven inflation would force the Fed to maintain restrictive policy longer. Services inflation stability proved critical, as services dominate most developed economies including the U.S., UK, and eurozone nations.
Global investors interpreted Daly's comments as confirmation the Fed has contained inflation without triggering recession through overly tight policy. Markets from London's FTSE to Hong Kong's Hang Seng responded positively to reduced uncertainty around U.S. monetary policy, which influences central bank decisions worldwide.
Technology sector strength demonstrated continued international confidence in AI and semiconductor growth despite economic headwinds. The sector outperformed across regions, suggesting investors globally view tech as resilient when backed by fundamental demand.
The simultaneous reduction in monetary policy and political risks created conditions for broad equity gains across developed markets. Risk appetite returned as key uncertainty factors diminished, with emerging markets also participating in the rally on improved global sentiment.
Sources:
1 Nasdaq, "Stocks Finish Sharply Higher on Plans to Reopen the US Government" (November 10, 2025)