European Stock Markets Recover Yesterday’s Losses, Wall Street Falls

On European stock markets, share prices slightly increased on Wednesday morning, mainly due to a correction following yesterday’s significant decline.

The STOXX 600 index of leading European stocks was up 0.2 percent at 9:30 AM, recovering part of yesterday’s losses.

In this context, the London FTSE index strengthened by 0.12 percent to 9,127 points, while the Frankfurt DAX rose by 0.45 percent to 23,595 points, and the Paris CAC increased by 0.49 percent to 7,690 points. Yesterday, the indices fell significantly, a consequence of the political crisis in France and investor concerns over rising inflation in the eurozone.

However, this morning the markets calmed down, and the indices slightly increased.

On most Asian stock markets, share prices fell this morning. The MSCI Asia-Pacific index was down 0.2 percent at 9:30 AM. Share prices in Hong Kong, Japan, Shanghai, and Australia fell between 0.7 and 1.8 percent, while in India and South Korea, they rose by about 0.3 percent.

Thus, most Asian markets are following yesterday’s decline on Wall Street, where the Dow Jones weakened by 0.55 percent, the S&P 500 by about 0.7 percent, and the Nasdaq index by 0.8 percent.

September Decline on Wall Street

On Wall Street, share prices fell on Tuesday as investors were concerned after the Appeals Court ruled that most tariffs recently imposed by U.S. President Donald Trump are illegal.

The Dow Jones fell by 0.55 percent to 45,295 points, while the S&P 500 slid by 0.69 percent to 6,415 points, and the Nasdaq index by 0.82 percent to 21,279 points.

On Friday, the U.S. Appeals Court ruled that most of Trump’s tariffs are illegal, undermining his use of tariffs as a key weapon in international economic policy.

Trump announced an appeal to the Supreme Court. The tariffs may remain in effect until October 14, but their future is uncertain.

– After this ruling, the question arises: ‘Has the Trump administration alienated our trading partners while also losing tariff revenues?’ This is what troubles the markets, says Oliver Pursche, Vice President at Wealthspire Advisors.

This week, investors will focus on the U.S. employment report, which will be released on Friday and could significantly impact expectations regarding interest rates.

The market estimates that there is over a 90 percent chance that leaders of the U.S. central bank will reduce rates by 0.25 percentage points at the meeting on September 17.

If Friday’s data shows that the labor market continues to weaken, expectations will solidify that the Fed will lower interest rates in September.

However, if it turns out that the labor market is stable, the Fed’s decision may depend on the inflation report in the U.S., which will be released next week.

On Monday, there was no work in the U.S. due to the holiday, making Tuesday the first working day of September.

The decline in share prices on the very first working day of September could, analysts say, negatively affect investor sentiment as past data shows that this month is the weakest for capital markets in the year.