Global stock markets traded in mixed directions Thursday as investors weighed stronger-than-expected U.S. employment data against the backdrop of corporate earnings and shifting expectations for Federal Reserve interest rate cuts.
The main U.S. indices opened higher but reversed gains by midday, ending lower. The focus now turns to Friday’s release of the January Consumer Price Index (CPI) report for further insight on inflation and the Fed’s monetary policy path. A robust U.S. jobs report for January, which showed job creation more than doubling forecasts and a dip in unemployment, eased immediate concerns about economic slowdown. However, the data also reinforced expectations that the Fed will delay rate cuts, with market pricing now pointing to a reduction in July rather than June.
“Caught between payrolls and CPI, US markets have found themselves unable to maintain momentum,” noted Chris Beauchamp, chief market analyst at IG.
European markets presented a more positive picture. Paris’s CAC 40 closed at a record high, supported by gains in major companies. London’s FTSE 100 also reached a fresh peak during the session but ended 0.7 percent lower, reflecting tepid fourth-quarter growth data from the UK economy. “The strength seen in Europe… comes from improved earnings data from some of the big hitters,” said Joshua Mahony of Scope Markets.
Several corporate results drove significant moves. Siemens surged 5.8 percent after raising its annual outlook on strong AI-related demand. EssilorLuxottica rose 3.8 percent and Hermès gained 2.8 percent on better-than-expected earnings. These gains were offset by a 4.2 percent slump for Sanofi following the unexpected replacement of its CEO, Paul Hudson.
Asian markets were mostly subdued, reflecting the negative close on Wall Street the previous day. Persistent concerns about the cost and viability of massive AI investments continued to pressure technology stocks globally, with fears spreading beyond the initial sector.
“US stocks are still failing to offer much in the way of compelling risk-reward, especially as AI fear continues to move from sector to sector,” Beauchamp added.
At the close, the S&P 500 fell 1.2 percent and the Nasdaq dropped 1.8 percent. In Europe, the DAX was flat while the CAC 40 rose 0.3 percent. In currency markets, the dollar weakened against the yen but was steady against the euro and pound. Oil prices declined over 1.7 percent.
Investors now await the January U.S. inflation data, which will be critical in shaping the near-term trajectory for interest rates and market sentiment. The divergence in global markets underscores the complex interplay between economic data, corporate performance, and central bank policy expectations.
