European Stocks Set to Rise; Dollar Firms
European stocks are set to open stronger after President Donald Trump sought to reassure investors about the U.S. economic outlook and Ukraine accepted a proposal for a 30-day ceasefire with Russia.
European equity index futures rose as much as 1.2% while contracts for U.S. stocks were steady after Trump said he did not see a U.S. recession, downplaying Wall Street jitters. The dollar gained against all Group-of-10 currencies and U.S. Treasury bonds edged higher.
Trump’s tariff policies, geopolitical realignment over Ukraine, stubborn inflation and the unknown pace of Federal Reserve interest rate cuts have battered markets this year, leaving U.S. stocks on the brink of a correction. “Any relief from all that geopolitical noise is a good thing for the market right now,” said Ken Wong, Asia equity portfolio specialist at Eastspring Investments.
News of a ceasefire in Ukraine and an easing of tariff tensions between the U.S. and Canada helped, he said. The VIX stock volatility gauge is hovering near its highest level since August, while a similar gauge for Treasury bonds is at levels not seen since November as market participants remain concerned about U.S. economic growth. Trump told top executives gathered at a Business Roundtable meeting that he prioritized getting quick approvals, especially on environmental regulations, and planned to announce major power projects soon, according to a person familiar with the session. He also reiterated a suggestion that companies could cut taxes if they manufacture their products in the U.S. Goldman Sachs Group Inc. strategists cut their targets for U.S. equity benchmarks amid growing concerns about growth in the world’s largest economy and a decline in the “Magnificent 7” of large-cap technology stocks.
Trump sought to play down fears of a U.S. economic recession. “I don’t see it at all. I think the country is going to thrive,” he said at the White House. He added that the market “is going to go up and it’s going to go down. But, you know, we have to rebuild our country.”
Source: Bloomberg
