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Global stock markets are stabilizing after this week’s rally, as investors digest the first actions of newly inaugurated U.S. President Donald Trump.
While optimism surrounding AI-driven stocks has boosted the tech sector, concerns over potential trade tariffs are dampening sentiment. At the same time, investors remain focused on economic data and Trump’s upcoming speech at the World Economic Forum in Davos.
European Stock Markets Hold Steady, Tech Sector Under Pressure
The Stoxx Europe 600 Index remained nearly unchanged on Thursday, following Wednesday’s near-record high. However, technology stocks dropped more than 1%, erasing the strong gains from the previous day. Among the biggest losers was Puma SE, which saw a sharp decline after disappointing quarterly results.
The UK’s FTSE 100 index rose by 0.2% to 8,565 points, approaching its all-time high. However, the FTSE 250 midcap index experienced a slight decline of 0.2%. Specific companies faced notable movements: CMC Markets dropped 16.7% after issuing a muted forecast, and IG Group fell 6.4% despite reporting a 30% rise in first-half profit. Inchcape decreased by 13.3% following a downgrade by J.P. Morgan, and Associated British Foods slipped nearly 3% due to weak UK market performance and a reduced sales outlook for its Primark brand.
In the United States, Nasdaq 100 futures fell 0.5%, while S&P 500 contracts were down 0.2%. This came after a strong rally on Wednesday, fueled by optimism surrounding artificial intelligence and corporate earnings, which pushed the S&P 500 to the brink of a record high.
Mixed Signals from the Trump Administration
Markets are reacting to Donald Trump’s initial policy plans, which bring both optimism and uncertainty. His pledge to boost investments in artificial intelligence has lifted tech stocks, while his threat to impose tariffs on European and Chinese goods has weighed on sentiment. So far, Trump has not taken concrete action, but uncertainty remains high.
Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, warns of short-term volatility.
“If the proposed tariffs become reality, regions dependent on trade could suffer significantly,” Haefele stated.
“However, we still believe the U.S. stock market can continue to grow, supported by ongoing economic strength.”
Asian Markets and Focus on Davos
In Asia, stock markets posted gains, helped by reassuring signals from Chinese policymakers reaffirming their support for the economy. The MSCI Asia Pacific Index rose for the fourth consecutive day, while China’s CSI 300 Index jumped 1.8% before paring gains.
Meanwhile, investors are focused on Trump’s upcoming speech at the World Economic Forum in Davos, as well as key corporate earnings reports from General Electric and Texas Instruments.
Additionally, U.S. jobless claims remain a critical area of focus.
Calm in the Bond Market
The yield on 10-year U.S. Treasury bonds held steady at 4.62%, while the U.S. dollar showed little movement in foreign exchange markets.
Investors appear to be in wait-and-see mode, closely watching Trump’s policy moves—especially potential trade measures and their impact on the global economy.
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