New York (AFP) – Most stock markets bounced on Monday on hopes of US interest rate cuts after weak jobs figures raised concerns about the world’s top economy. The broad gains followed a Wall Street sell-off on Friday in reaction to the jobs data and news that dozens of countries would be hit with US tariffs ranging from 10 to 41 percent. Major US indices spent the entire day in positive territory, with the broad-based S&P 500 finishing up 1.5 percent.
“Traders and investors have made a lot of money by deciding that tariffs won’t matter, and they’re not going to change that now,” said Steve Sosnick of Interactive Brokers. “I think the bias that most of them have now is ‘Let’s not think about tariffs as being a problem until they actually prove that they are.'”
European indices mostly started the week on the front foot, with Paris and Frankfurt both ending the day up more than one percent. “Investors seem to be taking an optimistic view…betting on an increased likelihood of further monetary easing by the Fed after Friday’s employment figures,” said John Plassard, head of investment strategy at Cite Gestion Private Bank. CME’s FedWatch tool now has investors seeing a 94.1 percent chance of the Fed making a quarter-point cut in interest rates at the next meeting in September. Plassard noted, however, that “uncertainty reigns” as US President Donald Trump’s latest round of tariffs are set to take effect on Thursday.
Switzerland’s stock market dropped around two percent at Monday’s open, its first session as it returned from a holiday after a tough 39-percent US tariff rate was announced. But the index later pared most of its losses on hopes the Swiss government, which announced it would make an improved offer to Washington, could negotiate a reduction in the levy, which is steeper than that imposed on the European Union and Britain.
London advanced, lifted by banking stocks after the sector was granted a reprieve from the worst of feared compensation claims over controversial car loans dating back to 2007. Lloyds Banking Group jumped nine percent while Close Brothers, listed on the FTSE 250, soared more than 23 percent.
Asian investors started the week mixed, with Hong Kong and Shanghai advancing while Tokyo fell. Stocks had struggled Friday as US jobs growth fell short of expectations in July, with revised data showing the weakest hiring since the Covid-19 pandemic — fueling concerns that Trump’s tariffs are starting to bite. Trump responded to the data by firing the commissioner of labor statistics, accusing her of manipulating employment data for political reasons. Markets reacted more favorably on Monday, as the hiring slowdown boosted hopes of Fed rate cuts to support the economy.
Elsewhere, oil prices fell more than two percent after a sharp output increase by eight OPEC+ countries, with markets anticipating abundant supply. However, they later trimmed their losses after Trump threatened to hike tariffs on Indian goods further over its purchases of Russian oil.
– Key figures at around 2050 GMT –
New York – Dow: UP 1.3 percent at 44,173.64 (close)
New York – S&P 500: UP 1.5 percent at 6,329.94 (close)
New York – Nasdaq Composite: UP 2.0 percent at 21,053.58 (close)
London – FTSE 100: UP 0.7 percent at 9,128.30 (close)
Paris – CAC 40: UP 1.1 percent at 7,632.01 (close)
Frankfurt – DAX: UP 1.4 percent at 23,757.69 (close)
Tokyo – Nikkei 225: DOWN 1.3 percent at 40,290.70 (close)
Hong Kong – Hang Seng Index: UP 0.9 percent at 24,733.45 (close)
Shanghai – Composite: UP 0.9 percent at 3,583.31 (close)
Dollar/yen: DOWN at 147.08 yen from 147.40 yen on Friday
Euro/dollar: DOWN at $1.1573 from $1.1587
Pound/dollar: UP at $1.3285 from $1.3279
Euro/pound: DOWN at 87.11 pence from 87.25 pence
West Texas Intermediate: DOWN 1.6 percent at $66.29 per barrel
Brent North Sea Crude: DOWN 1.3 percent at $68.76 per barrel
burs-jmb/sst
© 2024 AFP
