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Stock market weighed down: Fed interest rates remain stable
Current report on losses on the German stock market due to US interest rate cut uncertainties and robust labor market data. DAX falls by 1.24%. Euro falls. Trade details and reactions.
Stock market weighed down: Fed interest rates remain stable
The German stock market suffered losses due to uncertainty over possible interest rate cuts by the US Federal Reserve this year. The US government's robust jobs report further reinforced these concerns. The DAX fell by 1.24 percent to 18,175.04 points.
According to chief economist Thomas Gitzel from VP Bank, the good labor market data in the USA is not slowing down. This is considered positive for the US economy as it becomes self-sustaining. On the other hand, it could become a problem for the Fed as it raises questions about whether interest rate cuts are even necessary. Although this is not yet the focus of market participants, the debate could intensify.
This week, the leading index Dax recorded a loss of 1.72 percent, which represents the first weekly loss after eight consecutive positive weeks. The MDax, the index of medium-sized stocks, lost 1.29 percent to 26,915.13 points.
A bad start to the day was already foreseeable after the New York stock exchanges recorded negative developments. Statements by the president of the regional US Federal Reserve Bank in Minneapolis led to interest rate concerns that spread to Europe. Fed member Neel Kashkari's comments raised the possibility that there could be no rate cuts this year if inflation and economic growth remain stable.
Practically all companies in the Dax recorded losses due to the overall poor mood on the markets. Deutsche Börse's shares were an exception and rose by 0.6 percent as the company benefits from high trading volumes in turbulent market phases.
The leading indices in Europe also showed negative developments. The EuroStoxx 50, the Cac 40 from France and the FTSE 100 from Great Britain each lost around one percent. However, the New York Dow Jones Industrial gained 0.9 percent at the close of trading in Europe.
The euro fell against the US dollar. The European Central Bank set the reference rate at $1.0841. On the bond market, the current yield fell from 2.41 percent to 2.40 percent, while the Rex bond index rose by 0.04 percent. The Bund future, on the other hand, lost 0.60 percent.