Stock market recap: Dow, S&P 500 and Nasdaq steady as Powell signals possible rate cuts

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Dow, S&P 500 and Nasdaq steady

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Global indices

- S&P 500: 6,466.91, +1.52%

- Nasdaq 100: 21,496.53, +1.88%

- Dow Jones Industrial Average: 45,631.74, +1.89%

- FTSE 100: 9,321.40, +0.13%

- Nikkei 225: 42,807.82, +0.41%

- Hang Seng Index: 25,829.91, +1.94%

- Shanghai Composite: 3,883.56, +1.51%

U.S. markets

Wall Street ended last week with strong gains after Powell signaled the Fed could begin easing monetary policy as soon as next month. Traders now see an 84% chance of a quarter-point cut in September, according to the CME FedWatch tool. The rally was led by cyclical and value stocks as investors rotated out of megacap tech, anticipating broader gains if easing begins.

This week’s focus will be on earnings from Nvidia, Dell and Marvell, which could determine whether the tech sector resumes its rally or continues to underperform. Traders will also be closely watching the July personal consumption expenditure price index, the Fed’s preferred inflation gauge, due Friday.

European markets

European shares opened lower Monday as investors weighed Powell’s comments against regional risks. The pan-European Stoxx 600 slipped 0.3% to 558.58, while Germany’s DAX and France’s CAC 40 each fell about 0.5%. U.K. markets were closed for a public holiday.

Orsted shares dropped 15% after U.S. authorities ordered a halt to a major offshore wind project, while JDE Peet’s surged 17% after Keurig Dr Pepper agreed to acquire the Dutch coffee group for €15.7 billion ($18.4 billion). The week ahead will bring key inflation data from major eurozone economies, adding further direction to the region’s trading outlook.

Asian markets

Asian stocks started the week strongly as Powell’s speech bolstered sentiment. China’s CSI 300 climbed 2.08% to a 37-month high at 4,469.22, while Hong Kong’s Hang Seng Index surged 1.94% to 25,829.91, driven by tech and mining shares. Taiwan’s Taiex advanced 2.16% to 24,277.38, while South Korea’s Kospi gained 1.3% to 3,209.86.

Japan’s Nikkei 225 added 0.41% to close at 42,807.82, with the Topix up 0.15%. Australia’s S&P/ASX 200 ended flat at 8,972.40, retreating after briefly crossing the 9,000 mark. The rally in Asia suggests stronger appetite for risk assets despite lingering global uncertainties.

Summary and outlook

Markets worldwide are entering the week with cautious optimism, buoyed by Powell’s signal that rate cuts are on the table. While U.S. equities remain near record highs, Europe is grappling with regional headwinds and corporate-specific shocks. Asia, meanwhile, is extending its rally as investor sentiment improves.

The trajectory of global markets will hinge on whether Powell’s comments translate into concrete action in September, with earnings reports and inflation data likely to shape short-term moves.

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