THREE forces acted upon the local stock market this week, none of which involved North Korea. In chronological order they were the news that August's industrial production jumped 19 per cent year-on-year; US Federal Reserve chair Janet Yellen's speech in Cleveland, which the market took to mean that a December interest rate hike is back on the table; and the Trump administration's tax proposals, which the US market hopes will boost US profits and the economy, even if there is a long way to go before they are passed.

August's factory output numbers sent economists scrambling to reassess their estimates of full-year growth, while Ms Yellen's comments about the need for the Fed to stick to its hiking path sent traders scrambling to reassess their belief that there might not be a December hike.

In the federal funds futures market, the implied probability of the Fed acting in December is now 67 per cent, up from about 40 per cent a fortnight ago. Given that higher rates have been taken to mean higher bank earnings, the impact here was immediate, with large gains in the three banks pushing the Straits Times Index up 24 points on Wednesday. The push proved to be short-lived though, with prices drifting backwards thereafter. Also short-lived was any boost from the industrial production numbers.