BANGKOK — Global stock markets exhibited a mixed performance on Monday following a week in which U.S. equities experienced a generally disappointing trend, despite finishing strong on Friday. The S&P 500 managed to close the week down by 2%, even after a broad rally in the final trading day.
The mood in the markets improved slightly after U.S. lawmakers successfully passed a budget deal early Saturday morning, effectively averting a government shutdown that would have taken effect just before Christmas.
In Europe, Germany’s DAX index decreased by 0.3%, settling at 19,830.42. The CAC 40 in Paris also fell 0.3%, marking 7,251.05, while Britain’s FTSE dropped 0.2% to reach 8,068.17. In contrast, futures for the S&P 500 and the Dow Jones Industrial Average saw gains, rising by 0.3% and 0.1%, respectively.
Asian markets responded more positively overall, with Tokyo’s Nikkei 225 index advancing by 1.2%, landing at 39,161.34. The dollar gained slightly in value, trading at 156.50 Japanese yen, up from 156.48 yen. Notably, Japanese automotive giants Honda Motor Co. and Nissan Motor Corp. announced their intention to explore a potential merger, which could also include Nissan’s smaller partner, Mitsubishi Motors Corp. Following this news, Honda’s shares saw a 3.8% increase, while Nissan’s stock rose by 1.6%.
The Hang Seng index in Hong Kong recorded a 0.8% growth, reaching 19,883.13. In contrast, the Shanghai Composite index experienced a slight decrease of 0.5%, falling to 3,351.26. Meanwhile, Australia’s S&P/ASX 500 index surged by 1.7%, closing at 8,201.60. South Korea’s Kospi added 1.6%, reaching 2,442.01, and Taiwan’s Taiex saw a significant gain of 2.6%, buoyed by a 4.4% increase in TSMC, the world’s leading semiconductor manufacturer. Hon Hai Precision Industry, reportedly involved in pursuing a significant stake in Nissan, also gained 3.8%. Additionally, Bangkok’s SET index advanced by 1.4%.
On Friday, the U.S. stock market saw the S&P 500 increase by 1.1%, with the Dow climbing 1.2% and the Nasdaq composite rising by 1%. Remarkably, around 90% of stocks in the S&P 500 appreciated in value. Tech titans like Nvidia spearheaded the market rally, aided by a report indicating that a key measure of inflation tracked by the Federal Reserve fell slightly more than expected last month. This development provided some optimism amid concerns that inflation may not easily retreat to the Fed’s 2% target from its previous high of over 9%.
Concerns regarding inflation were notably addressed by Fed Chair Jerome Powell last week when he hinted that the central bank might be less inclined to lower interest rates next year than initially anticipated. This revelation sent tremors through the stock market, which had previously seen 57 all-time highs in 2023, fueled by the expectation of a series of rate cuts extending into 2025. Current data from CME Group indicates that investors are now largely anticipating one or two rate cuts, and potentially none, in the upcoming year.
Skeptics have cautioned that stock prices may be susceptible to declines after reaching such elevated levels, noting that the market likely requires several favorable conditions to sustain its impressive gains. Additionally, Wall Street was reminded late Thursday of the unpredictability of the market’s trajectory.
The U.S. stock market has seen a decline in some of its gains since the announcement of Trump’s election, which initially sparked optimism about heightened economic growth and more relaxed regulations favoring corporate profitability. However, concerns over Trump’s trade policies, including tariffs, have raised alarms about rising inflation, increased U.S. debt, and potential disruptions in global trade.
In commodities, early Monday trading saw U.S. benchmark crude oil prices rise by 24 cents, reaching $69.70 per barrel. Meanwhile, Brent crude, the international benchmark, increased by 24 cents to settle at $73.18. Additionally, the euro saw a slight drop, trading at $1.0415, down from $1.0433.