---
title: "LIVE MARKETS-HSBC believes risk rally has room to run"
description: "HSBC strategists believe the current risk rally in markets has further potential for growth, citing record highs in Wall Street indexes and a 15% rise in emerging market local debt this year. Despite "
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/258572068.md"
published_at: "2025-09-23T17:13:58.000Z"
---

# LIVE MARKETS-HSBC believes risk rally has room to run

> HSBC strategists believe the current risk rally in markets has further potential for growth, citing record highs in Wall Street indexes and a 15% rise in emerging market local debt this year. Despite challenges in the U.S. labor market and rising delinquencies, HSBC remains optimistic, suggesting that the uneven recovery supports risk assets and may lead to Federal Reserve rate cuts. The bank favors cyclicals and financials in equities, is overweight on emerging market equities, and expects gold to outperform long-duration U.S. bonds.

Dow ~flat; S&P 500 inches red; Nasdaq dips

Energy biggest gainer among S&P 500 sectors; cons disc down most

Dollar, bitcoin dips; gold higher, crude jumps >1.5%

U.S. 10-Year Treasury yield eases to ~4.14% Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at

### HSBC BELIEVES RISK RALLY HAS ROOM TO RUN

With Wall Street’s main indexes hitting a series of record highs, emerging market local debt up 15% year-to-date, and credit spreads at cycle tights, HSBC strategists believe the rally is far from over.

“The broad-based asset price inflation is continuing on full throttle. And we think there’s more to come,” HSBC said in a note led by Chief Multi-Asset Strategist Max Kettner.

Despite signs of strain in the U.S. labor market and rising delinquencies and higher tariffs, HSBC remains bullish. It argues that the uneven nature of the U.S. recovery, where lower-income households are under pressure while broader growth reaccelerates, is actually supportive for risk assets. This dynamic increases the likelihood of rate cuts from the Federal Reserve.

HSBC says this environment helps keep yields below levels that would hurt valuations and supports further upside in equities, credit, and emerging markets.

The bank favors cyclicals and financials within equities, remains overweight emerging market equities and local rates, and expects gold to outperform long-duration U.S. bonds. It is underweight U.S. Treasuries, gilts, and Japanese government bonds, citing concerns around debt sustainability and central bank independence.

HSBC also sees Japanese bank stocks benefiting from a potential rate hike by the Bank of Japan in October. Wall Street’s main indexes were little changed in Tuesday afternoon trading after remarks from Fed Chair Jerome Powell reiterated the central bank is in a “challenging situation” as it balances sticky inflation against weak job growth.

The S&P 500 and Nasdaq remained in the red, while the Dow was essentially unchanged.

(Medha Singh)

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Market snapshot

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.