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06/06/24
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Global Stocks at Record Peak After ECB Cuts Rates
On Thursday, global stocks hit an all-time peak, and the euro gained after the European Central Bank cut interest rates for the first time in about 5 years, but also said that future moves may take a while.
Although ECB policymakers delivered their expected 0.25% cut to 3.75%, markets were feeling deflated after the bank added it now didn’t expect inflation to drop back to target until 2026.
This was enough to trim the STOXX 600 pan-European index’s gains to 0.6%, while the euro edged up to nearly $1.0890 against the US dollar.
MSCI’s global index containing shares in 47 countries rose by 0.3% to a record peak. On Wall Street, the S&P 500 index was steady close to an all-time high, the Dow Jones Industrial Average rose 0.4%, while the Nasdaq Composite Index dropped 0.1%, also from an all-time peak.
Chip maker Nvidia dropped 0.8% from a record high, after surpassing $3T in market value in the prior session.
Saltmarsh Economics’ Marchel Alexandrovich said the markets would now focus on whether they will also cut in Sept.
He added that he wasn’t surprised that inflation forecasts had been revised higher as inflation has proven to be resilient and that made things difficult.
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