Global equity markets rose sharply after the U.S. Federal Reserve signaled that interest-rate cuts could be on the table later this year, following inflation data that came in softer than expected. The prospect of easier monetary policy lifted investor sentiment and fueled a broad market rally.

Wall Street led the advance overnight, with traders responding to comments from the Fed chair that suggested policymakers are becoming more comfortable with the direction of price pressures. The latest figures pointed to cooling inflation, strengthening the view that the central bank may soon have more room to reduce borrowing costs.

Markets across regions joined the move higher as investors reassessed the outlook for growth, credit conditions, and corporate earnings. Lower rates would likely ease pressure on consumers and businesses that have faced elevated financing costs, while also supporting valuations in risk assets.

Even so, analysts cautioned that the path toward cuts is not guaranteed. Future decisions will depend on incoming economic data, including employment and inflation reports, which could still shift expectations for the rest of the year.