Global Stock Markets Experience Gains Amidst US Inflation Figures
European and Asian stock markets saw significant gains on Monday, with gold reaching a record high of nearly $3,820 an ounce. This development comes after the release of US inflation figures, which met expectations and alleviated concerns surrounding President Donald Trump’s latest tariff announcements. The US inflation rate, as measured by the personal consumption expenditures (PCE) index, rose to 2.7 percent in August, up from 2.6 percent in July.
Investors are closely watching the situation in Washington, where lawmakers have yet to reach a funding compromise to keep the government running. This impasse could potentially impact the release of key economic data. Meanwhile, the dollar has dropped against its main rivals, and oil prices have retreated due to speculation that OPEC+ may increase output, leading to concerns of a glut.
The drop in oil prices follows last week’s rally, which was driven by mounting tensions between NATO countries and oil producer Russia, increasing the possibility of fresh sanctions on Moscow. Despite these developments, US stock futures are pointing to a higher open, with investors anticipating the release of the latest nonfarm payrolls report on Friday for clues into the Federal Reserve’s next move.
The Federal Reserve’s preferred gauge of inflation rose in line with expectations, giving the bank room to cut interest rates again. While the 2.7 percent reading on the August PCE index was up from 2.6 percent in July and well above the Fed’s two percent target, policymakers are focusing on supporting the labor market after a string of weak jobs readings.
In corporate news, shares in GSK climbed 2.5 percent in London midday trading after the British pharmaceutical giant announced that longtime chief executive Emma Walmsley will be replaced by its chief commercial officer in January. Lufthansa, meanwhile, said it will cut 4,000 jobs, nearly four percent of the German airline giant’s workforce, after profits slumped in the face of mounting headwinds.
Key stock market indices saw gains, with London’s FTSE 100 up 0.6 percent, Paris’s CAC 40 up 0.1 percent, and Frankfurt’s DAX up 0.2 percent. In Asia, Hong Kong’s Hang Seng Index rose 1.9 percent, while Tokyo’s Nikkei 225 slipped 0.7 percent. The euro and pound both gained against the dollar, with the euro rising to $1.1721 and the pound increasing to $1.3433.
As the global economy continues to navigate the impact of trade tensions and monetary policy decisions, investors will be closely watching the latest developments and their potential effects on financial markets. The record high in gold prices and the gains in stock markets reflect the ongoing uncertainty and the search for safe-haven assets in times of economic volatility.