London (AFP) – Stock markets fell Thursday despite stronger-than-expected US economic growth data as investors await key inflation figures later this week. Morning trading on Wall Street deepened losses that began earlier this week as Federal Reserve chief Jerome Powell tempered expectations about the pace of interest-rate cuts.
The US government revised its second-quarter economic growth rate upwards on Thursday to 3.8 percent from 3.3 percent, as consumers spent more than expected. But analysts are focused on Friday’s release of the Fed’s preferred gauge of inflation — the personal consumption expenditure (PCE) index — and next week’s non-farm payrolls report.
“Despite today’s solid GDP results, this week’s major focus is on tomorrow’s PCE report,” said Bret Kenwell, US investment analyst at the trading platform eToro. “Active investors will want to see an in-line or lower inflation result, keeping the Fed on pace for two more rate cuts in 2025.”
The US central bank — citing a weak labour market — last week announced its first rate reduction of the year and forecast there could be two more by the end of 2025. But expectations were dealt a blow on Tuesday as Powell warned that stocks are “fairly highly valued” and that there was “no risk-free path” on rates.
The PCE data “may also shift investor expectations over the speed and depth of additional easing measures from the US central bank,” said David Morrison, senior market analyst at financial services firm Trade Nation. Among individual stocks, Apple shares rose slightly even though the European Union rejected the US tech giant’s plea for the bloc to repeal its landmark digital competition law.
In Europe, shares in German software giant SAP fell two percent after the EU launched an antitrust probe into the company. European stock markets were down at the close, including Zurich, which fell as the Swiss National Bank held rates at zero percent and warned that US tariffs were weighing on the economy. In Asia, major indices were mixed.
– Key figures at around 1530 GMT –
New York – Dow: DOWN 0.3 percent at 45,978.42 points
New York – S&P 500: DOWN 0.6 percent at 6,601.15
New York – Nasdaq Composite: DOWN 0.6 percent at 22,367.81
London (close) – FTSE 100: DOWN 0.4 percent at 9,213.98
Paris (close) – CAC 40: DOWN 0.4 percent at 7,795.42
Frankfurt (close) – DAX: DOWN 0.6 percent at 23,534.83
Tokyo – Nikkei 225: UP 0.3 percent at 45,754.93 (close)
Hong Kong – Hang Seng Index: DOWN 0.1 percent at 26,484.68 (close)
Shanghai – Composite: FLAT at 3,853.30 (close)
Euro/dollar: DOWN at $1.1676 from $1.1737 on Wednesday
Pound/dollar: DOWN at $1.3348 from $1.3445
Dollar/yen: UP at 149.74 yen from 148.91 yen
Euro/pound: UP at 87.50 pence from 87.29 pence
Brent North Sea Crude: DOWN 0.4 percent at $68.19 per barrel
West Texas Intermediate: DOWN 0.5 percent at $64.65 per barrel
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© 2024 AFP
