New York (AFP) – Stock markets mostly dropped on Tuesday as investors awaited a Federal Reserve interest-rate decision while anticipating US trade deal breakthroughs that have yet to materialize. Stocks had risen most of the last two weeks in anticipation of progress on the trade front as US President Donald Trump and top appointees played up the negotiations.
But major US indices spent the entire Tuesday session in the red, with the Dow Jones Industrial Average finishing down one percent. The market “seems to be disappointed over the fact that we’re not hearing any trade deal news,” said Art Hogan of B. Riley Wealth Management. Investors are also monitoring the Fed, which is expected to hold interest rates steady on Wednesday, even as Trump pushes for more cuts.
“Traders appear to be taking profits and moving to the sidelines ahead of the Federal Reserve’s FOMC meeting, which kicks off today,” said David Morrison, senior market analyst at Trade Nation, referring to the monetary policy branch of the reserve, the Federal Open Market Committee. While data last week showed the US economy contracted in the first quarter, strong jobs and services sector figures suggest there is still some resilience.
“It’s a big week for central bank interest rate decisions,” noted AJ Bell investment director Russ Mould. “The key focus will be on forward-looking commentary and whether the Fed is getting worried about Trump’s tariffs,” Mould added. On Thursday, the Bank of England is expected to cut its key rate by a quarter point to 4.25 percent amid concerns of weak growth in Britain.
In Europe, Frankfurt’s stock market shed 0.4 percent after German conservative leader Friedrich Merz was confirmed as chancellor following an initial setback. Paris also ended the day down 0.4 percent while London finished flat. The US dollar was lower against major rival currencies, while oil prices shot higher in what analysts called a technical rebound following Monday’s selloff.
US pharmaceutical and biotech stocks took a beating due to the appointment of oncologist Vinay Prasad to a top post at the US Food and Drug Administration. Prasad has been an outspoken critic of the agency’s prior approach to Covid-19 vaccines and other key decisions. Merck and Pfizer both fell more than four percent, while Moderna sank more than 12 percent.
In company news, US food delivery service DoorDash agreed to buy Deliveroo in a £2.9-billion ($3.9-billion) deal that values the UK group at less than half of its initial public offering price. Shares in Deliveroo rose 2.1 percent on London’s second-tier FTSE 250 index, while DoorDash shares dropped 7.4 percent in New York. Danish wind turbine maker Vestas jumped nine percent in Copenhagen after it stuck to its annual earnings forecasts despite geopolitical uncertainty and US tariffs.
– Key figures at around 2050 GMT –
New York – Dow: DOWN 1.0 percent at 40,829.00 (close)
New York – S&P 500: DOWN 0.8 percent at 5,606.91 (close)
New York – Nasdaq Composite: DOWN 0.9 percent at 17,689.66 (close)
London – FTSE 100: FLAT at 8,597.42 (close)
Paris – CAC 40: DOWN 0.4 percent at 7,696.92 (close)
Frankfurt – DAX: DOWN 0.4 percent at 23,249.65 (close)
Hong Kong – Hang Seng Index: UP 0.7 percent at 22,662.71 (close)
Shanghai – Composite: UP 1.1 percent at 3,316.11 (close)
Tokyo – Nikkei 225: Closed for holiday
Euro/dollar: UP at $1.1373 from $1.1315 on Monday
Pound/dollar: UP at $1.3370 from $1.3296
Dollar/yen: DOWN at 142.44 yen from 143.70
Euro/pound: DOWN at 85.04 pence from 85.09
Brent North Sea Crude: UP 3.2 percent at $62.15 per barrel
West Texas Intermediate: UP 3.4 percent at $59.09 per barrel
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© 2024 AFP
