Following Fed Drama, Tech Stocks Rise as the Dollar Bounces. – Europe Market Wrap
Following Wednesday’s surge in concern about Fed Powell’s future, the Dollar recovered as dip-buyers stepped in. Tech stocks edged higher.
The Dollar rose 0.4%, maintaining its month-to-date gains, aided by diminishing forecasts of interest-rate decreases in 2025. Equities in Europe and Asia climbed as TSMC raised its revenue growth forecast, boosting confidence in the strength of AI spending. Nasdaq 100 futures rose.
Speculation about Powell’s future roiled markets on Wednesday, before Trump dismissed the possibility of replacing him. Trump, who has long advocated for lower interest rates, has made no secret of his displeasure with the Fed Chairman.
US Treasury rates moved higher across the curve as markets signalled that the Fed’s wait-and-see attitude to policy easing would likely prevail. Swaps are pricing fewer than two quarter-point cuts this year, down from a possible three at the beginning of the month.
Meanwhile, Trump has toned down his criticism towards China in the hopes of organising a summit with President Xi and achieving a trade deal with the world’s second-largest economy. He also stated that he would send letters to over 150 countries informing them of potential 10% or 15% tariff charges.
