Fed's cautious signals cool investors' ardor

The U.S. stock market ended Wednesday trading little changed, with the S&P 500 index barely moving. Investors reacted to a speech by Federal Reserve Chairman Jerome Powell, who warned that inflation could accelerate again as summer approaches, including due to the consequences of former President Donald Trump's tariff policy. According to Powell, these duties are starting to be directly reflected in consumers' wallets.

The Fed kept its course, but the ranks of hawks are growing

As expected, the American regulator left the key interest rate unchanged. Forecasts for this year still include two potential cuts, but disagreements are growing within the committee itself: more and more members do not see any reason to cut rates at all. Moreover, the expected pace of easing of credit policy was revised - now only one cut of 0.25 percentage points is expected in 2026 and 2027.

Powell's comments turned the trading around

Initially, the session was held in the "green zone" - investors showed moderate optimism. However, after the Fed chief's remarks, the mood changed: US Treasury yields partially recouped their previous decline, and the S&P 500 index lost momentum for growth.

Tech in the green, energy in the red

Market sectors reacted in different directions: information technology became the growth driver, while energy companies suffered the biggest losses. The S&P 500 tech sector index (.SPLRCT) was among the winners of the day, while the energy sector (.SPNY) was under the greatest pressure.

The movement of key US indices:

Dow Jones Industrial Average (.DJI): fell by 44.14 points (-0.10%), to 42,171.66;

S&P 500 (.SPX): fell by 1.85 points (-0.03%), to 5,980.87;

Nasdaq Composite (.IXIC): Up 25.18 points, or 0.13%, to 19,546.27

Claims Fall, But Worries Remain

The U.S. Labor Department reported that initial jobless claims fell slightly from the previous week. However, economists estimate that the decline still points to weakening labor market momentum in June.

Regulatory Approval Boosts Crypto Markets

Shares in stablecoin company Circle Internet (CRCL.N) soared 33.8% after the U.S. Senate approved a bill aimed at creating a regulated environment for dollar-pegged cryptocurrencies. Market participants saw this as a major step toward legitimizing digital assets in the U.S. financial system.

Steel prices rise, and Nucor shares with it

Steel giant Nucor (NUE.N) added 3.3% to its market cap after publishing quarterly guidance that beat analysts expectations. The company cited solid demand and improving margins, giving investors a cautiously optimistic view of the sector.

Geopolitics and the Fed leave European investors uneasy

European stock markets opened lower on Thursday. The pan-European STOXX 600 index fell 0.6% to 537.37, its lowest in four weeks. Increased investor anxiety is linked to both the Fed's inflation warnings and concerns about the potential for greater U.S. involvement in the Middle East.

Trading is taking place in a subdued environment, with U.S. markets closed for a national holiday.

Oil in the green, tourism in the red

The escalation of the conflict immediately affected oil prices: raw material prices went up, which pushed up the European energy sector (.SXEP), which added 0.6%.

At the same time, tourism and entertainment companies felt the negative: the sector index (.SXTP) fell by 1.5% against the backdrop of rising oil prices, which increased overall pressure on the market.

Volatility Rising, Fed Raising Questions

The Euro STOXX Volatility Index (.V2TX) jumped to 23.78, its highest since May 23, up 1.38 points.

At the same time, Federal Reserve Chairman Jerome Powell said that two rate cuts were possible in 2025, due to inflationary pressures caused by U.S. tariffs. His forecasts were mixed, and markets did not get a clear understanding of how exactly the Fed will cope with risks in the economy.

Europe: Unexpected Moves by Central Banks

The Swiss National Bank, as expected, cut the rate to zero. However, the biggest surprise of the day came from Oslo: the Norges Bank cut the rate for the first time in five years, by 25 basis points at once.

Against this background, the Norwegian stock index (.OSEAX) managed to add 0.1%, becoming a rare exception amid the general decline in European markets.

Bank of England on pause: will the rate remain unchanged?

Economists and market participants agree that the Bank of England will keep its key interest rate at the current level on Thursday. In the context of unstable inflation dynamics and uncertainty in the economy, the regulator is likely to prefer a cautious approach and will not rush to ease policy.

Stora Enso soars: strategic review of assets inspired investors

Shares of the Finnish company Stora Enso (STERV.HE), which operates in the forestry and paper industry, jumped sharply by 17.8%, becoming the leader of growth in the STOXX 600 index. Such a powerful boost was caused by the company's announcement that it was starting a strategic review of its assets in Sweden. Investors perceived this as a possible step towards restructuring or selling part of the business - and actively responded with purchases.

Manadatum Slips as Shareholder Reduction Puts Pressure on Price

Insurer Manadatum (MANTA.HE) shares fell 5.3%, becoming the day's losers. The stock was pressured by news that investment group Altor had reduced its stake in the company. The weakening of a major investor's participation raised concerns about the future stability of Manadatum's capital structure.