Global stock markets displayed mixed outcomes as investors reacted to significant economic updates and awaited the U.S. Federal Reserve’s upcoming monetary policy meeting. European exchanges closed slightly lower, while Wall Street showed varied results. Anticipation of a potential interest rate cut by the Fed heightened optimism among market participants. Noteworthy gains were seen in Broadcom and Munich Re, while oil prices rose due to geopolitical tensions. The euro strengthened against the dollar as bond yields increased.
Global Stock Markets Show Mixed Results
On Friday, global stock markets exhibited a lack of clear direction as they processed a week filled with significant macroeconomic updates. Investors are now shifting their focus to the upcoming monetary policy meeting of the U.S. Federal Reserve (Fed) scheduled for next week.
European Markets Close Slightly Lower
In Europe, major stock exchanges ended the day with modest declines. Paris saw a drop of 0.15%, while London and Frankfurt fell by 0.14% and 0.10%, respectively. The Swiss Market Index (SMI) in Zurich also experienced a decrease of 0.18%.
Across the Atlantic, Wall Street had mixed results; the Dow Jones decreased by 0.20%, the Nasdaq gained 0.12%, and the S&P 500 remained unchanged.
Art Hogan, an analyst at B. Riley Wealth Management, noted, “We are coming out of a week that was more negative than positive.” He pointed out that various economic indicators have been influenced by inflation, particularly referencing the consumer price index (CPI) released on Wednesday and the producer price index (PPI) shared on Thursday.
With the Fed’s monetary policy meeting on December 17 and 18 approaching, investors are adopting a cautious stance. Independent analyst Michael Hewson predicts, “It is widely anticipated that the Fed will cut its key interest rate for the third time this year.” Following rate reductions in September and November, market participants are highly optimistic, with 97% betting on another quarter-point cut, as indicated by CME Group’s tool.
If this anticipated cut is realized, it would precede the incoming Trump administration, which may implement policies that could increase inflationary pressures.
Meanwhile, the European Central Bank (ECB) announced a 0.25-point reduction in its key rates on Thursday but revised its growth forecasts for the eurozone downward, which dampened investor sentiment. Additionally, the German Federal Bank adjusted its growth outlook, predicting a mere 0.2% increase in German GDP for the next year, a significant drop from the previous estimate of 1.1% made in June.
In the bond market, interest rates on ten-year German government bonds rose to 2.26%, up from 2.20% the previous day. French ten-year bonds increased to 3.04%, while U.S. ten-year bonds climbed to 4.39%, up from 4.33% at Thursday’s close.
The euro made gains against the dollar, rising by 0.31% to 1.0499 dollars per euro around 19:20 GMT.
Industry Highlights: Broadcom and Munich Re Shine
In notable stock performances, semiconductor giant Broadcom experienced a remarkable surge of 24.43% in New York, fueled by investor enthusiasm regarding its potential for “massive” growth associated with artificial intelligence (AI). However, other stocks in the sector showed mixed results; Nvidia fell by 2.30%, Micron rose by 4.34%, and Intel dropped by 2.12%.
Meanwhile, Munich Re, the world’s largest reinsurer, closed the session with a 5.57% increase after announcing expectations of a net profit of 6 billion euros in 2025 and surpassing 5 billion euros in 2024, bolstered by strong operational performance across all business segments. This positive news also benefited its competitor, Hannover Re, which rose by 1.51%.
In the commodities market, oil prices ended the week on a high note, influenced by sanctions against Russia and Donald Trump’s efforts to intensify pressure on Iran. The price of North Sea Brent crude for February delivery increased by 1.47%, reaching $74.49, while West Texas Intermediate (WTI) crude for January delivery rose by 1.81% to $71.29.