European stock markets saw a consolidation on Friday morning, following a wave of optimism sparked by the recent actions of the U.S. Federal Reserve (Fed). On Wednesday, the Fed lowered its key interest rates by 50 basis points, a move that had boosted investor sentiment across the global markets.
In Paris, the CAC 40 dipped by 0.35% to 7,589.13 points at 07:20 GMT, after a notable rise of 2.29% the previous day. Similarly, the FTSE 100 in London dropped by 0.48%, while Frankfurt’s DAX fell by 0.60%.
The broader EuroStoxx 50 index declined by 0.43%, with the FTSEurofirst 300 down by 0.31%. Meanwhile, the Stoxx 600 fell by 0.32%, primarily driven by profit-taking in the luxury sector (-1.22%) and the technology sector (-0.94%). These growth-oriented sectors had recently benefited from the expectation of sustained lower borrowing costs.
On Wall Street, futures indicated slight declines. The Dow Jones was set to drop by 0.09%, the S&P 500 by 0.18%, and the Nasdaq by 0.25%. This followed record highs for the Dow and S&P 500 in the previous session.
The recent optimism in the financial markets is largely attributed to expectations of a soft landing for the U.S. economy, combined with the hope that other central banks will follow the Fed’s lead in cutting interest rates. However, after the Bank of England (BoE) maintained its interest rates on Thursday, both the Bank of Japan (BoJ) and China’s central bank also opted to leave their rates unchanged on Friday.
In Europe, economic data showed mixed results. Germany’s Producer Price Index (PPI) dropped by 0.8% year-on-year in August, which was less than expected. However, U.K. retail sales exceeded forecasts, increasing by 2.5% year-on-year in August.
In corporate news, Alten shares fell by 3.01% after the company once again revised its organic growth forecast downward for the year. Mercedes-Benz saw an 8.03% drop after lowering its annual margin forecast for the second time in under two months, dragging the broader European automotive sector down by 3.59%.
Elsewhere, ASML shares dropped by 1.43% after Morgan Stanley downgraded the semiconductor company to “equal weight.” Novo Nordisk gained 0.80% after the European Medicines Agency approved the use of Wegovy for treating heart disease related to obesity.
By focusing on the latest developments in European stock markets and central bank decisions, this report provides insight into the factors influencing market performance today.