European stocks tiptoed higher on Tuesday, as the market grappled with ongoing uncertainty about future interest rate cuts.
The pan-European Stoxx 600 nudged up by 0.15% in early trading, showcasing a mixed performance across sectors.
Tech stocks climbed 1.28%, while oil and gas slipped 1.2%.
Zealand Pharma, a Danish biotech firm, saw its shares rebound by 4%.
This bounce-back followed a dip in the previous session after CEO Adam Steensberg mentioned that the company is looking for a major pharma partner to advance its weight loss drug to the market.
In a noteworthy move, Sweden’s Riksbank trimmed interest rates by 25 basis points to 3.50% and hinted at further cuts on the horizon.
This decision underscores a growing trend among central banks to navigate the delicate balance of stimulating economies while keeping inflation in check.
Eyes are now on the Federal Reserve, with key events this week that could set the tone for global markets.
The Fed’s meeting minutes, due Wednesday, and Chair Jerome Powell’s upcoming Jackson Hole speech on Friday, are likely to offer investors crucial insights.
Currently, market expectations, as reflected by the CME FedWatch Tool, suggest a 76% probability that the Fed will lower rates by 25 basis points in September.
Meanwhile, Asia-Pacific markets largely followed Wall Street’s lead, reflecting Monday’s rally. U.S. stock futures remained flat overnight after both the S&P 500 and Nasdaq Composite extended their longest winning streaks of 2024.
In Europe, data releases included Germany’s producer price index and the EU’s final inflation rate year-on-year, providing further context to the region’s economic landscape.
The markets may be inching up, but the path forward is anything but clear.
Investors continue to walk a tightrope, balancing optimism with caution as central banks around the world steer through choppy waters in the business environment.
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