Stock markets fluctuate in US, EU amid rising uncertainties
A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York City, US, on Nov. 26, 2024. (AFP Photo)
U.S. and European stock markets fluctuated on Nov. 27 as the personal consumption expenditures (PCE) price index rose in the US, while traders grappled with President-elect Donald Trump’s tariff threats and a political impasse in France.
Wall Street saw red with both the Dow and S&P 500 retreating from records on the eve of the Thanksgiving holiday. The Nasdaq also declined.
European stock markets were also mindful of rising concerns that Europe could be the next tariff target for Trump. The Paris stock market ended off 0.7% as a French political standoff over a belt-tightening draft budget for 2025 threatens to topple the government. Frankfurt also dipped, while London just finished in the green.
Fed anticipated cutting interest
In the U.S., the personal consumption expenditures (PCE) price index rose 2.3 percent in the 12 months to October, up from 2.1% in September, which was broadly in line with forecasts. The figure was also close to the US Federal Reserve’s long-term target of two percent, keeping the central bank’s inflation fight largely on track.
Futures markets currently place the odds at about two-thirds that the Fed will cut interest rates again in December by a quarter of a percentage point. Kathleen Brooks, research director at XTB, said the figure “is a little hot” but “it is not outside the most recent range for monthly increases.” Brooks said, “U.S. traders can pack up for the Thanksgiving holiday with little to fear at this stage.”.
Trump, who has named a tough-negotiating hawk to be his trade envoy when he takes office in January, has announced plans to hit China, Canada, and Mexico with hefty tariffs right away. “Investors are growing increasingly concerned that Donald Trump’s next tariff target is continental Europe,” said Dan Coatsworth, investment analyst at AJ Bell.
For Europe, this would create “another potential headwind on top of the existing one in the form of lackluster economic activity,” he said.
Trump tariffs discourage trade markets
While Trump’s victory has been broadly welcomed by the financial markets, there is concern that his widely pledged rise in tariffs could be inflationary.
The Republican has announced Jamieson Greer as his trade envoy, saying that Greer, who served as chief of staff to U.S. Trade Representative Robert Lighthizer during Trump’s previous administration, had played a “key role” in imposing tariffs on China.
Bitcoin moved back past $95,000, having hit a record Friday and come within a whisker of the $100,000 mark in hopes that Trump will move to ease restrictions on the crypto market.
After another record-breaking lead from earlier, Chinese markets rallied as data showed that China’s industrial sector narrowed losses in October.
Meanwhile, the price of Arabica coffee hit the highest level since 1977 because of concerns about limited supplies caused by the drought in Brazil this year.
