European Stock Market News: buoyed by record for S&P 500

European stock market gained, after a record S&P 500 finish, on expectations of US interest rate reduction following Federal Reserve Chare Jerome Powell’s statement that inflation is returning to a downward trend.

On the eve of the UK elections, much attention is still focused on politics. In France, the benchmark CAC 40 index rose as anti-National Rally parties attempted to prevent Marine Le Pen’s far-right group from securing an overall majority in the final round of legislative voting Sunday. Europe’s Stock 600 index increased 0.4%, led by miners and technology companies.

US market futures stayed flat ahead of a session that would be shortened due to the July 4 holiday. The S&P 500 closed above 5,500 for the first time on Tuesday marking the 32nd record of the year. The Nasdaq 100 also achieved a record high closing above 20,000 for the first time.

With excellent corporate earnings an AI craze, and promises for lower interest rates, US stocks have defied doomsayers, adding more than $16 trillion to the S&P 500’s value since its October 2022 closing low. Bulls are convinced that the rally will last because there has been no substantial fall.

Given the psychological significance that “round numbers” have, the new record high closing in the S&P 500 and Nasdaq “could also be taken as another win” according to Chris Weston head of research at Pepperstone Group in Melbourne.

European Stock Market News Today

Investors are waiting for further hints on the policy outlook from the US initial unemployment claims and ADP employment statistics, which are expected on Wednesday. Fed Chair Powell said officials need more data before cutting interest rates, even though the bank has made “quite a bit of progress” in lowering inflation. There was little movement in the dollar or Treasuries.

Additionally, markets are preparing for Friday’s crucial US payroll numbers. According to economists, the data will likely reveal that firms hired roughly 190,000 new employees in June, while the unemployment rate remained at 4%.

Hedge funds have been selling European assets in tandem with the current political unrest brought on by the unexpected French election, which shocked markets. According to Goldman Sachs Group Inc.’s prime brokerage desk the shift was caused by both long positions being unwound and short positions being added in about equal numbers.

According to Goldman, Europe saw the largest decline in overweight positions worldwide in June reversing the buying trend that had been observed in May. The largest net selling for the financial sector since November 2021 occurred in funds that had the greatest exposure to financial stocks, especially banks.

Somewhere else Asian equities were on track for their biggest run of advances since May on Wednesday. With the benchmarks currently less than 1% off their all-time highs Japanese equities increased. According to a private indicator services activity in China grew at its slowest rate in eight months in June. This slowdown could heighten concerns about the future of the economy. While stocks on the mainland declined those in Hong Kong increased.

On indications of a large reduction in US crude stockpiles, oil prices surged to almost a two-month high. People familiar with the data indicate that the American Petroleum Institute recorded last week’s decline in crude inventory of 9.2 million barrels. Should official numbers verify that later on Wednesday, it would represent the worst decline in barrel terms since January.

Key events this week:

Eurozone S&P Global Eurozone Services PMI, PPI, Wednesday
US Fed minutes, ADP employment, ISM Services, factory orders, initial jobless claims, durable goods, Wednesday
Fed’s John Williams speaks, Wednesday
UK general election, Thursday
US Independence Day holiday, Thursday
Eurozone retail sales, Friday
US jobs report, Friday
Fed’s John Williams speaks, Friday

Some of the main moves in markets:

Stocks