European Markets Rise as Rate Cuts Boost Investor Optimism

Europe’s stock markets saw a positive shift this week, driven by central banks’ rate cuts and promising economic data. The European Central Bank (ECB) delivered its second rate reduction of the year, spurring a market rally across Europe. The Euro Stoxx 600 rose 0.15%, while Germany's DAX climbed 1.18%, France's CAC 40 added 1.13%, and the UK's FTSE 100 advanced 0.73%.

In the US, Wall Street extended gains for a fourth consecutive day, supported by easing inflation data and speculation on future Federal Reserve policy. Falling government bond yields and a softer US dollar helped boost precious metal prices, with gold reaching new highs. The technology sector also outperformed, with ASML gaining 3.48% and SAP rising 2.145% over five trading days, reflecting optimism in a lower interest rate environment.

Financial stocks posted notable gains. HSBC increased by 1%, UBS by 1.4%, and BNP Paribas by 1.37%. However, luxury goods struggled due to sluggish demand from China. LVMH shares dropped 5.31%, Hermès fell 7.31%, Ferrari slipped 2.67%, and Christian Dior declined by 4.52%. In pharmaceuticals, Novo Nordisk rose 2.66% as its anti-obesity pill showed promise.

The British pound and euro rebounded slightly after cooling US inflation despite the UK economy showing signs of stagnation. This week’s positive momentum reflects investors’ growing confidence in a stable interest rate environment, with the ECB’s decisions remaining data-driven as they assess future moves.