Stocks Struggle Higher as Fed Cut Bets Offset Tariff Fears – Europe Market Wrap
Stocks struggled to gain back some of last week’s steep losses as equity investors pinned their hopes on the Federal Reserve to ride to the rescue with interest-rate cuts following Friday’s dismal US jobs data.
Europe’s Stoxx 600 index rose about 0.6%. Banks led the advance after UK lenders won a major reprieve in a pivotal UK car finance case, with Lloyds surging more than 7%.
Friday’s tumble on Wall Street – sparked by rising US unemployment and slower job creation – boosted bets on a Fed rate cut to support the economy. Traders rushed into Treasuries despite worries about the inflationary effect of Trump’s tariffs, which have kept policy makers in hawkish mode.
The Swiss stocks benchmark, meanwhile, fell as the market reopened after a holiday, on worries about the impact from US President Donald Trump’s punitive 39% export tariff and a push for drugmakers to lower prices.
Treasuries pared last week’s gains as traders braced for a hefty slate of bond sales this week. Yields on the 10-year notes climbed three basis points to 4.25% after dropping 16 basis points Friday.
The dollar was steady after a gauge of die greenback’s strength plunged 0.9% on Friday.
Overnight-indexed swaps signaled more than 80% odds of a reduction next month while fully pricing in one more cut by year-end. Some market-watchers are even anticipating the Fed may cut rates by 50 basis points, twice the regular amount.
