Tech sector recovery drives global stock market surge despite China concerns
Tuesday saw global stock markets rise due to strong tech recovery, despite worries about China’s slow economy and US rate uncertainty. Nvidia’s shares increased by 8.5% on Monday, boosting trading in Asia and Europe. In New York, Nvidia’s shares went up by 2.5% before its second-quarter report today, Wednesday.
At the beginning of trading, Nasdaq focused on technology and rose by 0.7%. This followed a 1.6% increase on Monday due to a wider rally in tech shares. The Dow Jones Industrial Average had a slight rise, while the broader S&P 500 went up by 0.4%.
Analyst Patrick O’Hare noted the stock market’s positive outlook. In the afternoon, European stocks gained momentum, helped by lower bond yields.
Following a mixed Monday, efforts were made to counter recent market losses. Global stock markets are dealing with the chance of the US Federal Reserve increasing borrowing costs before year-end to control inflation.
Recent Washington data shows the strong world economy and resilient job sector, despite a year of rising interest rates pressuring businesses and consumers. Worries arise that more Fed rate hikes could lead to recession.
This week, Fed Chief Jerome Powell’s speech at a meeting of central bankers and business leaders is anticipated for insights into future policy. Lori Heinel from State Street Global Advisors told Bloomberg TV that further rate hikes risk a sharp slowdown or recession.
Traders remain concerned about China’s economy despite a small interest rate cut not alleviating fears of a slowdown. Authorities’ recovery measures lack details, prompting calls for comprehensive stimulus.
National Australia Bank’s Taylor Nugent doubts more monetary stimulus and leans towards broader fiscal policy. China’s property sector is worrisome, with major developers like Country Garden and Evergrande struggling with debts and interest obligations.
Stephen Innes of SPI Asset Management noted policy easing announcements didn’t boost confidence as desired. Key figures as of 1330 GMT: The Dow stock market slightly up, London’s FTSE 100 rose 0.5%, Frankfurt’s DAX increased by 1.0%, CAC 40 in Paris also up, and EURO STOXX 50 rose by 1.3%.
