On the world stock exchanges, stock prices rose strongly last week, thanks to the recovery of the technology sector and investors’ hopes that the US central bank will further cut interest rates in December.
On Wall Street, the Dow Jones index rose 3.2 percent last week, to 47,716 points, while the S&P 500 jumped 3.7 percent, to 6,849 points, and the Nasdaq index rose 4.9 percent, to 23,365 points.
The growth of the index is mostly thanks to the recovery of the share prices of technology companies, after a sharp decline seven days earlier.
In addition, investors believe the Fed will further cut interest rates by 0.25 percentage points in December, as it did in September and October.
Namely, the latest data indicate a slowdown in the growth of the American economy, so some leaders of the Fed said that they are ready to further reduce interest rates because the risk of weakening the labor market is greater than the risk of inflation.
Thanks to this, it is now estimated on the market that there is an 85 percent chance that the central bank will cut interest rates in December, while seven days ago those chances were around 40 percent, reports SEEbiz.
Wall Street was closed on Thursday for Thanksgiving, and trading was short on Friday.
“These days, before and after Thanksgiving, trading volume is usually modest, and the biggest support for the market comes from the belief that the Fed will cut interest rates further in December,” explains Chuck Carlson, director at Horizon Investment Services.
Thanks to last week’s strong growth, the Dow Jones and the S&P 500 ended November with slight gains, while the Nasdaq lost more than 1 percent.
In that month, the indices fluctuated tremendously. They fell sharply at the beginning of the month due to pressure on the technology sector as investors feared that share prices in the sector were too high.
However, after very unstable trading, the technology sector recovered at the end of November.
And on European stock exchanges, share prices rose last week. The London FTSE index gained 1.9 percent, to 9,720 points, while the Frankfurt DAX jumped 3.2 percent, to 23,836 points, and the Paris CAC rose 1.8 percent, to 8,122 points.
Thanks to last week’s strong growth, the STOXX 600 index of leading European shares recorded a slight gain in November.
