US stocks rose today, led by technology companies. The Dow Jones index, which includes shares of 30 leading American companies, gained 0.18 percent to 51,267.90 points. The broader S&P 500 index rose by 0.66 percent to 7,773.95 points, and the Nasdaq Composite index, which represents many companies from the advanced technology sector, increased by 1.05 percent to 27,477.31 points. It closed trading at a new high.
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Nvidia and Microsoft Drive Markets Higher, Euro Dragged Down by France’s Budget Problems
Shares of the manufacturer of Nvidia chips and software company Microsoft contributed significantly to the growth. Market sentiment was boosted by a drop in oil prices, driven by reports of increased crude exports from the Middle East and plans by the group of economically developed G7 countries to increase oil and diesel supplies. Investor attention is now shifting to the approaching start of the US corporate quarterly earnings season. Next week, several major US banks will present their third-quarter financial results.
On the foreign exchange market today, the euro against the US dollar fell to its lowest level in 17 months, but later recouped some of its losses. Its decline is due to budget problems in France, which are raising concerns among investors about a possible debt crisis in the eurozone, reports Reuters agency. Shortly after 10:00 PM CEST, the single European currency was down approximately 0.3 percent, trading near 1.1220 USD. Previously, it had fallen as low as 1.1161 USD, its lowest since last May.
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Concerns Over French Debt Drag Down Euro; Dollar Boosted by Higher Fed Rate Expectations
Concerns about France’s ability to keep its budget deficit under control have recently led to a widespread sell-off of French government bonds. “The latest developments in the bond market are increasingly worrying and to some extent reminiscent of the debt crisis,” said analyst Hauke Siemssen from Commerzbank.
According to analysts, France’s budget problems are very serious in themselves, and their resolution is further complicated by the tense political situation in the country ahead of the upcoming presidential elections. Planned budget cuts, which, among other things, are exacerbating funding shortages in the education sector, have led to protests across the country, Reuters agency points out. “Developments surrounding France are probably the most significant factor in the foreign exchange market this week,” said analyst Erik Bregar from Silver Gold Bull.
Prospects for further interest rate hikes in the United States are also contributing to the dollar’s rise against the euro in recent weeks. The US central bank (Fed) last month raised its benchmark interest rate by a quarter of a percentage point to a range of 3.75 to 4.00 percent. Its representatives also signaled that they expect further rate increases in the coming months.
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Source: ÄŒTK
