Global stock markets showed a mixed response on Monday, following comments from the Federal Reserve’s chair hinting that interest rate cuts might continue.
In Europe, markets dipped, with Germany’s DAX down 0.2% to 24,305.67 and France’s CAC 40 losing 0.6% to 7,918.34. The UK market was closed due to a holiday.
Futures for the S&P 500 and Dow Jones Industrial Average also fell by 0.2%.
Stocks on Wall Street saw gains on Friday, fueled by remarks from Jerome Powell regarding job market risks during a meeting in Jackson Hole, Wyoming.
This came after a surprisingly disappointing job growth report this month, leading many traders to look forward to interest rate cuts in response to pressure from President Trump, especially before the next Fed meeting in September.
While lower interest rates could stimulate borrowing and investment, they might also spark inflation.
Asian markets, in contrast, had a positive day.
Hong Kong’s Hang Seng index rose 1.9% to 25,829.91, while the Shanghai Composite increased by 1.5% to 3,883.56.
Despite ongoing concerns about tariffs impacting exports to the US and relatively weak domestic demand, these indices are trading at their highest levels in a decade.
Taiwan’s Taiex saw a gain of 3.1% with a 2.2% increase in semiconductor manufacturer TSMC Corp.
Japan’s Nikkei 225 was up 0.4%, achieving 42,807.82, primarily benefiting computer chip-related companies.
South Korea’s Cospi rose by 1.3% to 3,209.86.
In Australia, the S&P/ASX 200 barely moved, increasing by under 0.1% to 8,972.40.
Bangkok’s index grew by 0.7%, and India’s Sensex climbed by 0.5%.
Investors are particularly eyeing Nvidia’s revenue report set to be released Wednesday after market close, given its significant role in the artificial intelligence sector.
The company’s influence is noteworthy as it often sets trends in the broader market.
On the last trading day, the S&P 500 saw a 1.5% uplift, marking its first gain in six days, with the Dow jumping 1.9% and the Nasdaq also rising by 1.9%.
With lower interest rates being beneficial, small business stocks thrived because they rely on borrowing for growth.
Interestingly, the Russell 2000 Index climbed 3.9%, marking its best day since April.
However, Powell didn’t give any definitive timelines regarding interest rate changes.
He described the job market as stable, though it feels like “a strange kind of balance.” He emphasized that inflation could still rise significantly.
In bond markets, the yield on the 10-year Treasury fell from 4.33% to 4.25% later in the week, while the two-year yield, more closely linked to the Fed’s decisions, dropped from 3.79% to 3.69%.
Intel’s stock climbed by 5.5% after Trump mentioned the chip company had agreed to give the US government a 10% stake in its business.
Nvidia also saw a 1.7% rise, slightly softening its weekly losses.
The company, instrumental in the AI technology shift, has experienced some stock struggles lately amid concerns that it, along with other AI leaders, may have overvalued.
On the commodities front, US benchmark crude increased by 50 cents to $64.16 a barrel, while international Brent crude rose by 45 cents to $67.67.
The US dollar climbed from 146.88 yen to 147.34, while the euro dipped from $1.1727 to $1.1696.
