USA
After three days of growth following Donald Trump and the Republican Party's election victory, the S&P 500 neared 6000 points. The S&P 500 gained by above 4.00%, the NASDAQ rose by 6.00%, and the Dow Jones Industrial Average increased by nearly 4.00%. The Federal Reserve cut the key rate by 25 basis points to 4.75%, despite market uncertainty. Fed Chair Jerome Powell expressed confidence in inflation trends but faced speculation about his position under Trump. Gains were led by consumer durables and industrial sectors, while utilities and health technology lagged. Improved corporate earnings, particularly within the S&P 500, and expectations of potential pro-business policies from the Republican sweep boosted sentiment. However, geopolitical uncertainties, including potential trade wars and fiscal challenges, remained risks to the outlook. U.S. elections and policy shifts toward tariffs and deregulation have potential ripple effects on global markets. Persistent tensions in the Middle East added uncertainty to energy prices, with oil rising slightly during the week.
Europe
Major European indices closed the week in the red, with the Stoxx 600 down 0.84%, the FTSE 100 down 1.28%, Germany’s DAX 40 down 0.21%, Spain’s IBEX35 decreased by 2.46% and France’s CAC 40 down 0.95%. Eurozone equities experienced moderate gains as better-than-expected earnings in sectors like industrials and financials outweighed mixed economic data. Germany's industrial production showed contraction, hinting at persistent manufacturing weakness. The ECB's previous guidance on maintaining restrictive monetary policy continues to weigh on bond markets, but the prospect of a U.S. slowdown and easing U.S. yields provided some relief. Geopolitical tensions in the Middle East remain a downside risk for energy-dependent economies.
Japan
Japanese markets saw increases, with the Nikkei 225 up by 3.80% and the Topix index by 3.70%. The Japanese equity market faced headwinds, reflecting global volatility and subdued local sentiment. The yen's relative stability after recent declines provided some support to exporters. Economic indicators, such as consumer spending and wage growth data, suggested a mixed recovery picture. Geopolitical dynamics, particularly U.S.-China tensions and the broader implications of Middle Eastern conflicts, are keeping Japanese investors cautious.
China
The Chinese stock market experienced positive performance, with the Shanghai Composite Index increased by 5.51% and the Hong Kong Hang Seng Index up by 1.08%. Chinese markets exhibited resilience despite external pressures. The government’s policy support for strategic sectors, such as technology and renewable energy, provided a lift to local equities. However, weak trade data, including a drop in exports and imports, highlighted challenges in the global demand environment. Geopolitical developments, including U.S.-China trade tensions, and concerns over the domestic property sector continued to weigh on investor sentiment.