European Markets Hit Weekly Highs on Luxury Stocks’ Rebound
On Tuesday, European stock markets reached their highest levels in over a week, primarily driven by the surge in luxury goods companies. Meanwhile, the US stock market ended the day in the red as investors absorbed new clues about the future of US monetary policy.
US Market Performance
The Dow Jones Industrial Average dropped 0.19% to 46,292.78 points, the S&P 500 fell 0.55% to 6,656.96 points, and the Nasdaq Composite retreated 0.95% to 22,573.47 points.
The Dow Jones ended its four-session winning streak despite Boeing shares rising over 2% following President Donald J. Trump’s praise for Uzbekistan’s President Shavkat Mirziyoyev for signing an “excellent agreement” worth over $8 billion with the aerospace company.
Federal Reserve Chair Jerome Powell highlighted concerns about stock prices, stating that “stock prices are quite high.” He also mentioned that the path of interest rate reduction was unclear, describing it as a “complex situation.”
Market participants also noted the possibility of a US government shutdown before the September 30 deadline, following the Senate’s rejection of Republican and Democratic proposals to temporarily fund the federal government last week.
Tech Stocks Decline
On Monday, all three major indices closed at record highs after NVIDIA shares surged nearly 4% following the chip manufacturer’s announcement of a $10 billion investment in OpenAI for data center construction.
However, the Nasdaq led declines on Tuesday, with NVIDIA shares falling 2.82%. Amazon (-3.04%), Microsoft (-1.01%), and Apple (-0.64%) also experienced drops.
Other stocks contributing to the losses included Oracle (-4.36%), Synopsis (-4.75%), and Coinbase Global (-3.58%).
European Markets Surge
The pan-European STOXX 600 index closed 0.4% higher, reaching its highest level since September 16 earlier in the session. Most regional stock markets also advanced during the day.
The rebound in luxury goods companies, fueled by increased US spending and favorable wind energy valuations following a court ruling in favor of Danish firm Orsted, propelled European markets to these heights.
Key Questions and Answers
- What caused the decline in the US stock market? The fall was primarily due to uncertainty surrounding future US monetary policy, along with concerns about high stock prices expressed by Federal Reserve Chair Jerome Powell.
- Which sectors experienced losses? Technology stocks, including NVIDIA, Amazon, Microsoft, Apple, Oracle, Synopsis, and Coinbase Global, all saw declines.
- What drove the rise in European markets? The surge was mainly attributed to the rebound in luxury goods companies and gains in wind energy stocks following a favorable court ruling for Danish firm Orsted.
