Mexican Markets Surge on Banxico Rate Cut Hopes

BMV Hits Multi-Month Highs Amidst Economic Optimism

Mexico’s primary stock exchange, the BMV, experienced a significant rally, climbing 1.94 percent as its key indicator reached 58,260.88 units. This surge is largely attributed to the monetary policy decisions of the Bank of Mexico (Banxico), marking the third consecutive day of gains and signaling a potentially strong weekly close for the market.

Banxico’s Influence Drives Market Momentum

The benchmark Price and Quotation Index (CPI) concluded the trading session with a robust 1.94 percent gain, extending a positive trend. This upward movement is fueled by anticipation that Banxico will continue its interest rate cuts before the year concludes. “The expectation that the Bank of Mexico will continue with its cuts towards the closing of the year” is a key driver, according to Gabriela Siller, Director of Economic and Financial Analysis at Base Bank.

The FTSE-Biva index of the Institutional Stock Exchange (Biva) also saw a healthy increase, adding 1.78 percent to close at 1,170.12 points. This performance marks the BMV’s strongest daily advance since early May.

Year-to-date, the Mexican index has accumulated a substantial 17.7 percent gain, with a 1.5 percent increase already recorded in August. This positive trajectory highlights the resilience of the Mexican market in the current economic climate.

Peso Weakens Against Dollar Amidst Global Cues

In contrast to the stock market’s buoyancy, the Mexican peso registered a slight depreciation of 0.21 percent against the US dollar. By the close of trading on Thursday, the exchange rate stood at 18.63 pesos per dollar, according to data from Banxico.

Wall Street Navigates Trade Tensions and Tech Stocks

Meanwhile, Wall Street’s major indices presented a mixed picture. The Dow Jones and S&P 500 experienced declines of 0.51 percent and 0.08 percent, respectively, closing at 43,968.64 and 6,340 points. The Nasdaq, however, bucked the trend with a 0.35 percent gain, reaching 21,242.70 units.

Investor sentiment on Wall Street appeared cautious, influenced by President Donald Trump’s proposed 100 percent tariffs on semiconductor imports. Companies demonstrating significant investment in domestic manufacturing within the United States may be eligible for exemptions.

In the tech sector, Nvidia saw its gains moderate, rising by 0.75 percent, while AMD posted a notable 5.6 percent increase. Apple, following its commitment to invest an additional $100 billion in US production, closed the day up by 3 percent.

“Although 81 percent of S&P 500 companies have exceeded the expectations of analysts in their quarterly reports, some question the quality of the profits. In addition, caution persists before the new tariffs of 25 percent taxes to India, which raise the total rate to 50 percent,” highlight GBM analysts.

European Markets Mixed, Oil Prices Dip

In Europe, trading was also varied. London’s FTSE 100 was the sole index to register a decrease, falling 0.69 percent to 9,100.77 points, despite a 25-basis-point interest rate cut by the Bank of England. Germany’s Dax, conversely, saw the largest upward movement, climbing 1.12 percent to 24,192.50 points.

Oil prices continued their downward trend for the sixth consecutive session. West Texas Intermediate crude fell by 0.73 percent, and Brent crude was down 0.81 percent, as markets await a key meeting between Russian President Vladimir Putin and his US counterpart Donald Trump.

The Mexican stock market’s strong performance is particularly noteworthy given that the country’s GDP grew by 2.1% in the first quarter of 2025, according to the National Institute of Statistics and Geography (INEGI). This economic backdrop provides further support for the positive market sentiment.