Trump Election Gains Held by Stocks as Dollar Declines – Europe Market Wrap
US market futures maintained their post-Election Day gains, but the Dollar fell as traders continued to plot Donald Trump’s return to the White House and what it means for the Fed’s interest rate path. Traders expect the Fed to decrease interest rates by roughly 100 bps by September 2025, down from 110 bps on Tuesday.
S&P 500 contracts moved higher after the US benchmark jumped the previous session on predictions that the newly elected President will support corporates with pro-growth policies. The Dollar index fell 0.3% after reaching its highest level since 2022. Following Wednesday’s massive selloff, US Treasury yields remained relatively stable.
Markets are taking a respite Thursday after dealing with the far-reaching consequences of a Trump administration. His victory has pushed investors to accept economic policies that may result in fewer Fed rate cuts, as well as a likely Republican sweep of Congress, which might boost fiscal expansion.
Earlier on Thursday, the BoE cut borrowing prices by 25 bps, to 4.75%. BoE’s Bailey stated that interest rates are expected to fall gradually from here and that last week’s UK budget will raise inflation by little under half a percentage point at its peak.
Europe’s benchmark stock index rose 0.6% as traders considered the likelihood of new elections in Germany and whether this would assist to restart growth in Europe’s largest economy. The country’s 10-year yield surpassed the corresponding swap rate for the first time, as traders braced for the potential of a more tolerant administration to rising debt.
