European stocks tumble amid Fed’s hawkish stance
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European markets faced sharp declines on Thursday, with the STOXX 600 down 1.2% as risk-off sentiment gripped investors following the Federal Reserve’s hawkish guidance. Technology stocks led losses, while commodities and bonds responded to surging yields. Traders now focus on the Bank of England's upcoming rate decision.
Fed’s Hawkish Signal Sparks Selloff
The Federal Reserve’s decision to slow the pace of rate cuts in 2025, coupled with Chair Jerome Powell’s cautious tone on inflation, rattled global markets. The move spurred sharp declines in U.S. stocks on Wednesday, with major indexes posting their biggest losses in months. European stocks followed suit on Thursday, as investors digested the implications of a prolonged tight monetary policy.
Government bond yields surged in response, putting further pressure on equities and commodities. Oil prices (CL1!, BRN1!) fell alongside base metals (HG1!, ALI1!) as the stronger U.S. Dollar intensified selling in risk-sensitive assets.
Technology Stocks Lead the Decline
Rate-sensitive European technology stocks (.SX8P) bore the brunt of the selloff, down 1.9%, echoing overnight losses in U.S. megacap giants. Investors dumped growth-oriented sectors as rising yields made future cash flows less attractive.
Broader Market Impact
STOXX 600 Index: Fell 1.2% by 0809 GMT, marking its steepest drop in five weeks.
FTSE 100: The UK’s benchmark index dropped 1.2%, caught in the broader risk-off wave.
Commodities: Oil and base metal prices continued to slide as demand concerns grew amid tighter financial conditions.
Notable Movers
Amid the selloff, SoftwareOne Holding (SWON) surged 10.1% following the announcement of its acquisition of Crayon Group Holding (CRAYN) in a stock-and-cash deal valuing the Norwegian firm at $1.34 billion. Despite the news, Crayon’s shares dipped 1.6%.
Focus Shifts to Bank of England Decision
Market participants now turn their attention to the Bank of England’s rate decision, scheduled for 1200 GMT. Policymakers are widely expected to maintain the status quo on interest rates. Any surprises could add volatility to an already shaky market environment.
Market Call:
European equities remain under pressure, with a cautious stance warranted as monetary tightening expectations weigh heavily on sentiment. Traders should monitor the Bank of England’s decision for potential sector-specific impacts and stay attuned to commodity price movements influenced by a stronger dollar.
Fed’s Hawkish Signal Sparks Selloff
The Federal Reserve’s decision to slow the pace of rate cuts in 2025, coupled with Chair Jerome Powell’s cautious tone on inflation, rattled global markets. The move spurred sharp declines in U.S. stocks on Wednesday, with major indexes posting their biggest losses in months. European stocks followed suit on Thursday, as investors digested the implications of a prolonged tight monetary policy.
Government bond yields surged in response, putting further pressure on equities and commodities. Oil prices (CL1!, BRN1!) fell alongside base metals (HG1!, ALI1!) as the stronger U.S. Dollar intensified selling in risk-sensitive assets.
Technology Stocks Lead the Decline
Rate-sensitive European technology stocks (.SX8P) bore the brunt of the selloff, down 1.9%, echoing overnight losses in U.S. megacap giants. Investors dumped growth-oriented sectors as rising yields made future cash flows less attractive.
Broader Market Impact
STOXX 600 Index: Fell 1.2% by 0809 GMT, marking its steepest drop in five weeks.
FTSE 100: The UK’s benchmark index dropped 1.2%, caught in the broader risk-off wave.
Commodities: Oil and base metal prices continued to slide as demand concerns grew amid tighter financial conditions.
Notable Movers
Amid the selloff, SoftwareOne Holding (SWON) surged 10.1% following the announcement of its acquisition of Crayon Group Holding (CRAYN) in a stock-and-cash deal valuing the Norwegian firm at $1.34 billion. Despite the news, Crayon’s shares dipped 1.6%.
Focus Shifts to Bank of England Decision
Market participants now turn their attention to the Bank of England’s rate decision, scheduled for 1200 GMT. Policymakers are widely expected to maintain the status quo on interest rates. Any surprises could add volatility to an already shaky market environment.
Market Call:
European equities remain under pressure, with a cautious stance warranted as monetary tightening expectations weigh heavily on sentiment. Traders should monitor the Bank of England’s decision for potential sector-specific impacts and stay attuned to commodity price movements influenced by a stronger dollar.