Stocks Climb on Both Sides of teh Atlantic Amid Rate Cut Hopes
Global equity markets posted gains on Monday, buoyed by increasing optimism surrounding potential interest rate reductions. In the US, the technology sector spearheaded the rally, while European markets benefited from cautious optimism regarding geopolitical developments.
The Dow Jones Industrial Average finished the session up 0.3%, adding 125 points to close at 46,368.The S&P 500 saw a more substantial increase, rising 1% – or 62 points – to reach 6,665. The Nasdaq Composite led the charge with a 1.6% gain, equivalent to 352 points, ending the day at 22,625.
Strong performance from tech giants drove the US gains. Alphabet shares jumped 4.45%, closing at $312.90, and Tesla stock increased by 4.7% to $409.47.
the positive market sentiment followed comments from Federal Reserve Governor Christopher Waller, who indicated support for lowering interest rates at the December meeting. He cautioned, however, that the January decision could be intricate by a backlog of economic data. Market analysis reflects this shift in expectation, with the CME FedWatch tool now indicating a 79% probability of a 25 basis point rate cut in December, a significant increase from 42% recorded the previous week.
Across the Atlantic, European stocks also advanced. The Stoxx Europe 600 index edged up 0.15% to 562.88, despite a 3.45% decline in the defense and aviation sector. Investors are weighing the potential for a US-brokered ceasefire agreement between Russia and Ukraine.
Germany’s DAX index rose 0.65% to 23,239 points,while France’s CAC 40 fell slightly,down 0.3% to 7,959.The UK’s FTSE 100 remained relatively stable, closing at 9,534 points.
Individual stock movements in europe were notable. German biotechnology firm Bayer experienced a significant surge, with shares rising 10.9% following positive Phase 3 clinical trial results for its “Asundexyan” treatment. Conversely, Danish pharmaceutical company novo Nordisk saw its stock fall 5.8% (recovering from an earlier 10% drop) after announcing its “Rebelsus” pill failed to demonstrate the desired effect in slowing the progression of Alzheimer’s disease.