European stock markets may see a mixed start on Tuesday as investors anticipate the release of the July Federal Open Market Committee (FOMC) minutes and Federal Reserve Chair Jerome Powell's upcoming speech at the Jackson Hole Symposium, hoping for insights into future interest rate movements.
In a recent interview with The Wall Street Journal, Minneapolis Federal Reserve President Neel Kashkari indicated a willingness to consider lowering interest rates in September, citing concerns over a potential weakening in the labor market.
On the geopolitical stage, Israel has shown support for a peace proposal introduced by U.S. Secretary of State Antony Blinken during his Middle East tour. However, Hamas has criticized the U.S., accusing it of "buying time for Israel to continue its genocide."
Asian markets displayed mixed performance. Chinese stocks fell significantly after the People's Bank of China opted to keep its benchmark loan prime rate steady, following an unexpected cut in July. Conversely, Japan's Nikkei index increased by approximately 2 percent as the yen's rally paused and technology stocks, inspired by U.S. peers, climbed on the back of lower bond yields. This rise is fueled by growing confidence that the Federal Reserve will likely reduce interest rates by 25 basis points in each of the remaining 2024 meetings.
In currency and commodity markets, the U.S. dollar hovered near a seven-month low during Asian trading. Gold maintained its position above $2,500 per ounce, while oil prices continued to decline due to concerns over Chinese demand and easing tensions in the Middle East.
In the U.S., stocks advanced broadly on Monday as economic anxieties diminished and Federal Reserve officials signaled readiness to commence an interest-rate reduction cycle. Despite a significant drop in leading economic indicators in July, no imminent recession appeared to be indicated.
The tech-centric Nasdaq Composite surged by 1.4 percent, the S&P 500 gained 1 percent—marking its eighth consecutive session of growth—and the Dow Jones Industrial Average edged up by 0.6 percent.
In Europe, stocks extended their upward momentum for the fifth consecutive day on Monday, as investors awaited further economic indicators from the United States. The pan-European STOXX 600 index rose by 0.6 percent. Germany's DAX increased by 0.5 percent, France's CAC 40 climbed by 0.7 percent, and the U.K.'s FTSE 100 advanced by 0.6 percent.
