Wall Street fell last week, European investors optimistic

In the last four trading days of the past year, stock prices on Wall Street fell, while European investors were in good spirits at the end of the past year and at the beginning of the new one.

On Wall Street, the Dow Jones index slipped 0.7 percent last week to 48,382 points, while the S&P 500 fell 1 percent to 6,858 points, and the Nasdaq index dropped 1.5 percent to 23,235 points.

In the last four trading days leading up to the New Year holidays, trading volume on the world’s largest stock exchange was modest, and stock prices declined.

Investors focused on the minutes from the recent Fed leaders’ meeting, which showed that most supported a rate cut in December, the third time this year, but there are significant differences in opinion regarding risks to the economy.

While some Fed officials believe that rate cuts should continue due to weakness in the labor market, others argue that rates should be held at current levels for some time as inflation remains significantly above the Fed’s target of around 2 percent.

As a result, the minutes did not impact market expectations regarding interest rates.

According to recently published estimates, Fed leaders expect an average of one rate cut in 2026, while the market estimates that rates will be cut twice by 0.25 percentage points each.

Throughout the past year, the Dow Jones index rose about 13 percent, the S&P 500 about 16.4 percent, and the Nasdaq 20.4 percent.

Thus, last year continued the ‘bull’ market that began in October 2022.

On the first day of the new year, Wall Street indices rose, mainly due to a correction in stock prices after four days of decline.

European investors optimistic

On European exchanges, stock prices rose last week. The London FTSE index strengthened by 0.8 percent to 9,951 points, while the Frankfurt DAX also rose by the same amount, reaching 24,539 points. The Paris CAC, on the other hand, jumped 1.1 percent to 8,195 points.

Throughout the past year, the STOXX 600 index of leading European stocks strengthened by 16.6 percent.

Leading the growth was the Madrid IBEX index, with a jump of nearly 50 percent. It was followed by the Italian FTSE MIB index with a growth of 31.5 percent, marking its largest jump since 1998.

The German DAX index rose by about 23 percent, thanks to government stimulus measures, from fiscal incentives to infrastructure investments.

The London FTSE index rose by about 22 percent, while the smallest growth was recorded by the Paris CAC index, around 10.5 percent, due to a political crisis and rising budget deficit and public debt.