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Business and Politics

Wall Street and ZSE Decline, European Indices Rise, and the Dollar Continues to Weaken

Author: Lider/Hina

April 19, 2025

Image by: foto Shutterstock

On Wall Street, stock prices fell last week as growth in the U.S. economy is expected to slow, while European stock indices rose after the European Central Bank cut interest rates.

Last week on Wall Street, the Dow Jones fell 2.7 percent to 39,142 points, while the S&P 500 slipped 1.5 percent to 5,282 points, and the Nasdaq index dropped 2.6 percent to 16,286 points.

Among the biggest losers last week were shares of chip manufacturers, as Nvidia, the world’s largest producer of artificial intelligence chips, announced that U.S. restrictions on the sale of certain chips to China and other countries would cost it about $5.5 billion. As a result, the stock prices of several other chip manufacturers also fell.

There is already uncertainty in the market due to the trade war between the U.S. and China, and so far, neither side shows signs of backing down. – Companies are beginning to report on the impact of the trade war, and this is fueling uncertainty – says Bill Northey, director at U.S. Bank Wealth Management.

The Fed Will Wait for New Data

And that there are reasons for uncertainty was confirmed by the president of the U.S. central bank, Jerome Powell, who stated at an economists’ gathering that higher-than-expected tariffs will likely mean higher inflation and slower economic growth.

The Fed, Powell emphasized, will wait for more economic data before taking any action on interest rates. As a result, investors’ hopes that the central bank might soon lower rates to support economic growth and capital markets have diminished.

– Powell confirmed what investors are worried about, which is that the trade war will likely slow economic growth and keep inflation elevated – says Sam Stovall, strategist at CFRA Research.

As a result, quarterly business results of U.S. companies have taken a back seat. Especially since they pertain to the first quarter, before U.S. President Donald Trump imposed tariffs on imports, and investors are more interested in how the trade war between the U.S. and China will affect companies’ operations.

ECB Cuts Rates for the Third Time This Year

Meanwhile, European stock prices rose sharply last week. The London FTSE index strengthened by 3.9 percent to 8,275 points, while the Frankfurt DAX jumped 4.1 percent to 21,205 points, and the Paris CAC rose 2.5 percent to 7,285 points.

As expected, the European Central Bank cut key interest rates by 0.25 percentage points on Thursday, marking the third reduction this year to support the economy during this time of uncertainty due to the trade war.

ZSE: Crobex Indices Fell More Than One Percent Last Week, Trading Volume Decreased

On the Zagreb Stock Exchange, the Crobex indices fell more than one percent last week, losing part of the gains from the previous week, with news from domestic companies about dividends in focus for investors.

The Crobex index slipped 1.07 percent to 3,186 points, while the Crobex10 fell 1.22 percent to 2,004 points. Thus, they lost part of the gains from the previous week when they rose more than 1.4 percent. Among sector indices, the biggest drop was seen in Crobexnutrist, down 0.5 percent, while the biggest increase was in Crobexkonstrukt, up 2.7 percent.

Regular trading volume amounted to about 5 million euros, approximately 14 million less than the week before. However, a block trade of 1.1 million euros was executed in a transaction involving shares of Atlantic Group at a price of 44.20 euros per share. This stock also had the highest trading volume in regular trading, around 780 thousand euros, with its price remaining unchanged at 44.20 euros.

Following with a trading volume of nearly 600 thousand euros was the share of HT, which fell 4.5 percent to 40.60 euros. Trading volumes exceeding half a million euros were achieved with two other issues. The price of Adris Group shares fell 1.6 percent, while Končar EI dropped 0.9 percent.

Last week, Končar reported that management proposed to the General Assembly a decision to pay a dividend of 3 euros per share. Trading volumes exceeding 400 thousand euros were achieved with two issues, Zagrebačka Bank and Valamar Riviera. While the bank’s price plummeted 6.7 percent, the share of the tourism company rose 0.4 percent to 5.60 euros. Valamar’s management proposed a decision to the General Assembly last week to pay a dividend of 0.24 euros per share.

With trading volumes exceeding 200 thousand euros, two shares of Končar D&ST followed. The price of the preferred share rose 4.1 percent, while the regular share increased by 1.4 percent. The management proposed a decision to the General Assembly of the company to pay a dividend of 79.54 euros for both the regular and preferred shares. A total of 47 shares were traded on the ZSE last week, with 22 prices rising, 16 falling, and nine remaining stable.

Dollar Weakens Against Currency Basket for the Third Consecutive Week

In the currency markets, the value of the dollar against a basket of currencies fell last week for the third consecutive week, as the U.S. currency remains under pressure due to the trade war between the U.S. and China.

The dollar index, which shows the value of the U.S. dollar against six major world currencies, slipped 0.6 percent last week to 99.23 points, a new three-year low. Meanwhile, the euro exchange rate rose 0.3 percent to 1.1390 dollars.

The U.S. currency also weakened against the Japanese yen by 0.9 percent, bringing its price down to 142.20 yen. The dollar’s decline for the third consecutive week is a result of the ongoing trade war between the U.S. and China.

Indeed, U.S. President Donald Trump stated last week that he expects a trade deal with China, but did not elaborate further. The Chinese Ministry of Foreign Affairs, on the other hand, stated that China will no longer pay attention if the U.S. continues to play with tariff numbers. This was in response to Washington’s threat to increase reciprocal tariffs on imports from China to a total of 245 percent due to its countermeasures.

While Washington focused on the tariff war, China introduced a series of non-tariff restrictive measures. Among other things, in service sectors such as finance, consulting, and tourism, where the U.S. has had a significant surplus in trade with China for years, analysts say.

– The U.S. and China have become entangled in an unprecedented and costly game of chicken, and it seems that neither side intends to back down – says Ting Lu, an economist at Nomura.