Market Update: European Stocks Rise, U.S. Markets Slip

By Chris Prentice and Samuel Indyk
NEW YORK/LONDON (Reuters) – European stocks closed at a one-week high due to strong financial stocks and optimism surrounding a potential ceasefire in Ukraine. In contrast, global equities and major Wall Street indexes dipped on Thursday.

Oil prices declined after the Kremlin announced a meeting between Russian President Vladimir Putin and U.S. President Donald Trump.

Gold, traditionally seen as a safe haven during turbulent times, reached a two-week high.

Wall Street’s downturn came after reports suggested that Federal Reserve Governor Christopher Waller is the leading candidate for Federal Reserve chair, raising fears about the central bank’s independence. MSCI’s global stock index fell by 0.02% to 933.04.

The Dow Jones Industrial Average decreased by 0.77% to 43,851.17, while the S&P 500 and Nasdaq Composite dropped 0.47% to 6,315.33 and 0.30% to 21,104.91 respectively.

Analyst Kyle Rodda from Capital.com expressed concerns, stating, “There are persistent risks to the downside… Valuations are also stretched, with forward price-to-earnings ratios hovering near four-year highs. Trade uncertainty persists.”

On Thursday, new tariffs on imports from numerous nations were implemented, elevating the average U.S. import duty to its highest level in a century.

Conversely, European stocks saw their largest daily increase in over two weeks, bolstered by financial stocks amid a mix of corporate earnings and U.S. tariff news. The pan-European STOXX 600 index achieved a one-week high, while Europe’s FTSEurofirst 300 index rose by 0.93%.

Plans for a Trump-Putin meeting regarding the Ukraine conflict helped boost sentiment within European markets and supported the euro. Emmanuel Cau, Barclays head of European equity strategy, noted, “A ceasefire would be an extra positive.”

The Bank of England reduced interest rates; however, a split vote revealed that four out of nine policymakers were concerned about inflation and wanted to maintain rates, hinting that the BoE’s series of rate cuts might be approaching an end. The pound strengthened by 0.47% to $1.3416.

Dominic Bunning, head of G10 FX strategy at Nomura, remarked, “The vote split is clearly a lot more hawkish than I was expecting.”

In Asia, Japanese shares hit a record high. MSCI’s broader index for Asia-Pacific shares, excluding Japan, increased by 1.03%, with Japan’s Nikkei gaining 0.65%. Taiwan’s stock market surged by as much as 2.6% to a one-year high, and shares of chipmaker TSMC, benefiting from an increase in U.S. production, reached a record high.

The U.S. dollar rose by 0.12% against other currencies, while the euro fell by 0.21% to $1.1634. The yield on benchmark U.S. 10-year notes increased by 1.4 basis points to 4.246%.

In commodities, spot gold climbed by 0.68% to $3,391.39 an ounce. Global oil prices reversed early gains, with Brent crude futures declining by 0.45% to $66.59 per barrel and U.S. crude dropping by 0.51% to $64.02.