The past weeks of the American Stock Exchanges recorded a decline, while European capital markets achieved growth, stimulated by reducing interest rates by the European Central Bank.
On Wall Street, the Dow Jones index fell by 2.7 percent, finishing the week at 39,142 points. The S & P 500 weakened 1.5 percent, to 5,282 points, while the technological NASDAQ index recorded a drop of 2.6 percent, to 16,286 points.
The biggest losers of the week were the shares of the chips, especially after NVIDIA – the leading global chips for artificial intelligence – announced that American restrictions on exporting certain chips and other countries could result in losses of about $ 5.5 billion. The decline in value is affected by other technological companies in the sector.
Tensions between the United States and China further increase insecurity, and there is no indication of giving up on either side.
“The firms began to report on the influence of the customs war, which further disturbs the markets,” Bill Northey from the US Bank Wealth Management said.
Fed is waiting for new indicators
The President of the American Central Bank, Jerome Powell, warned that customs could be further pushed in inflation, while economic growth could slow down. He pointed out that the FED will wait for additional economic information before deciding on further moves with interest rates.
Due to such statements, investor expectations were reported to reduce interest in the United States soon, which would encourage economic growth.
“Powell confirmed what investors feared – that the trade war could brake growth and maintain inflation in high,” Stovella himself said from Cfra Research.
As a consequence, the quarterly business results of American companies have been due to the second plan, because they relate to the period before the introduction of new customs, while investors are more interested in what long-term effects will have the current trade conflict.
European Central Bank further lowered interest
Unlike the American market, European stock exchanges have finished growth. London FTSE increased by 3.9 percent, at 8,275 points, Frankfurt Dax by 4.1 percent, 21,205 points, while Paris CAC strengthened 2.5 percent, at 7,285 points.
The European Central Bank, as expected, lowered the key interest rates for the third time for 0.25 percentage points, wishing to support the economy in the terms of global uncertainty caused by trade tensions.
