European Stocks Rise Amid Global Rally On Interest Rate Hopes
European stocks rose, following U.S. stocks that closed at record highs, as easing concerns about price pressures fueled speculation of a Federal Reserve interest rate cut in September.
The Stoxx Europe 600 Index rose 0.5% as of 8:24 a.m. in London, trading at its highest level in nearly two weeks. Technology and construction stocks led the gains, while energy stocks led the declines.
In individual stocks, Vestas Wind Systems A/S fell as the Danish wind turbine company's quarterly failure to achieve profitability raised questions about its margin targets for the year. Nordic Semiconductor jumped 11% after reporting second-quarter EBITDA that beat analysts' average estimate.
Money markets are largely pricing in a 25-basis-point Fed rate cut next month after favorable U.S. inflation data on Tuesday eased price concerns. Treasury Secretary Scott Bessent suggested the Fed is open to a larger rate cut, perhaps 50 basis points.
However, some see the Fed holding rates unchanged. "With a balanced labor market and above-target inflation, there's no economic reason for the Fed not to keep interest rates on hold until the end of this year," said Atakan Bakiskan, an economist at Berenberg.
Concerns about the economy and uncertainty over the impact of US tariffs have weighed on European stocks, with the region's benchmark indexes trading in a relatively stable pattern since mid-May, with stocks still just below their March record highs. (alg)
Source: Bloomberg
