European stock markets opened lower on Friday, marked by investors’ concerns about a possible postponement of the Fed rate cut. Signs of resilience in the US economy are fuelling these concerns. Markets are also reacting to wage growth indicators in the eurozone and recent Fed meetings.
The European stock markets began Friday’s session in the red, impacted by concerns about a possible delay in the first rate cut by the US central bank (Fed).
In early trading, the Paris Bourse gave up 0.60%, Frankfurt 0.88% and London 0.71%. The CAC 40, the Paris Bourse’s flagship index, was down 0.19% at around 1:30 p.m., at 8,086.91 points, having closed the previous day at 8,102.33 points, with a slight rise of 0.13%.
Across the Atlantic, the New York Stock Exchange closed lower on Thursday, despite the enthusiasm surrounding Nvidia, whose shares climbed 9.3% to over $1,000. However, this was not enough to keep the indices in the green. The S&P 500 lost 0.74%, the Nasdaq Composite fell 0.4% and the Dow Jones dropped 1.53%, mainly due to Boeing’s 7.6% decline.
In Japan, the Tokyo Stock Exchange closed lower on Friday, following Wall Street’s trend, with recent US indicators indicating that inflationary pressures remain high in the US. The Nikkei index slipped 1.17% to 38,646.11 points, while the broader Topix index fell 0.49% to 2,741.34 points.
Investors are reassessing the prospects for rate cuts by the Fed and the European Central Bank (ECB).
“Equity markets are down slightly this week, due to rising geopolitical risks in Asia and, above all, fears over rates,” explains LBP AM strategist Xavier Chapard. “Good activity indicators, persistent inflationary pressures even in Europe, and the Fed members’ talk of patience increase the risks that key rate cuts will be later and more limited”.
German GDP growth
Shortly before European markets opened, investors learned that Germany’s gross domestic product (GDP) had risen in the first quarter, following a sharp decline at the end of last year and over 2023 as a whole, impacted by the crisis in German industry.
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