As Wall Street Sets Records, European Investors Are More Cautious

Last week on Wall Street, the S&P 500 index reached a new record level, thanks to strong earnings results from American companies, while trading on European exchanges was more cautious.

On Wall Street, the Dow Jones increased by 0.04 percent last week, to 38,671 points, while the S&P 500 rose by 1.4 percent, to 5,026 points, and the Nasdaq index by 2.3 percent, to 15,990 points.

Thus, the indices have risen for the fifth consecutive week, with the S&P 500 and Dow Jones reaching new record levels, while the Nasdaq is only 0.4 percent away from its all-time high.

This is attributed to better-than-expected quarterly earnings results from companies.

So far, about two-thirds of the companies in the S&P 500 index have reported their performance for the last quarter of last year, with around 81 percent exceeding analysts’ earnings expectations.

Therefore, it is now estimated that corporate earnings in that quarter rose by about 9 percent, while a month ago a growth of 4.7 percent was expected.

Among the biggest winners last week were shares of technology companies, driven by investor optimism regarding the development of artificial intelligence.

Macroeconomic data, on the other hand, showed that the U.S. economy continues to grow steadily and that the labor market remains strong.

This means that consumption could continue to grow, and inflation may remain elevated, prompting leaders of the U.S. central bank to indicate that there is no reason to rush to lower interest rates.

As a result, investors’ hopes that the Fed would begin the process of lowering interest rates as early as March have significantly diminished.

In contrast to the world’s largest stock exchange, trading on European exchanges was more cautious last week. The London FTSE index fell by 0.6 percent, to 7,572 points, while the Frankfurt DAX rose by 0.1 percent, to 16,926 points, and the Paris CAC by 0.7 percent, to 7,647 points.