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European markets ended lower on Tuesday while US benchmarks held near recent highs. Investors weighed stronger-than-expected US retail and industrial figures against a weaker UK labour market and soft German production. At the same time, gold price reached another record above $3,700 an ounce. Here’s what happened in the US stock market today:
US retail sales grew 0.6% in August, with core sales increasing 0.7%, indicating strong consumer demand. Industrial production also exceeded expectations, rising 0.1% despite forecasts of a decline. Analysts suggested these figures reinforced expectations for a modest 25-basis-point Federal Reserve rate cut rather than a larger move.
Economist James Knightley at ING noted that “substantial downward revisions” to earlier production data provided context, with manufacturing still 7.5% below its 2007 peak. Despite consumer strength, he highlighted that manufacturing accounts for under 10% of US output today, down from 21% of jobs in 1980.
Sterling rose 0.4% to $1.3656, the euro gained 0.8% to $1.1852, and the yen strengthened 0.6% against the dollar. The Bloomberg Dollar Spot Index dropped 0.5% as investors recalibrated expectations for the Fed’s rate path.
The FTSE 100 fell 81 points to close at 9,195, as banks and financials dragged the index lower. Barclays lost 2.6%, NatWest slipped 2.5%, and Prudential declined 2.35%. Insurers, including Aviva and Legal & General, also fell by about 2%. Haleon was hit hardest, dropping after Barclays cut its rating, citing slowing growth in the US and pressure from discount brands in Latin America. EasyJet and WPP also weakened on broker downgrades.
Losses in the financial sector offset gains in miners. Fresnillo advanced as investors flocked to precious metals, while Sainsbury’s rose on speculation about potential Argos interest. The broader Stoxx Europe 600 fell 1%, while Germany’s DAX and France’s CAC both recorded small declines.
In mid-caps, Trustpilot surged 9.5% after reporting stronger earnings and launching a £30 million buyback. Kier Group climbed 7.8% on rising profits and a 38% dividend hike, underscoring momentum in UK construction and infrastructure stocks.
Also Read: European Stocks: How Tech Losses Impact Broader Markets
US stocks traded mixed. The S&P 500 slipped 0.1% as of 11 a.m. in New York, while the Dow Jones fell 0.4%. The Nasdaq 100 was flat after nine straight gains, and the Russell 2000 lost 0.5%. The Bloomberg Magnificent 7 Total Return Index rose 0.6%, highlighting continued strength in major technology shares.
In global markets, the MSCI World Index was little changed. Treasuries were steady, with the 10-year yield holding at 4.03% and the two-year yield easing to 3.52%. Germany’s 10-year yield remained at 2.70%, while UK 10-year gilts edged up to 4.65%.
Gold added 0.2% to $3,686.20 an ounce, setting another record as investors bet on easing US policy. West Texas Intermediate crude rose 1.5% to $64.26 per barrel, supported by supply constraints. Bitcoin traded flat at $115,322, while ether fell 1.4% to $4,450.
With the Federal Reserve set to announce its decision on Wednesday, investors remain focused on the ‘dot plot’ of future rate projections. Markets are pricing in further cuts through 2025, while analysts warn that economic data could shift the pace of easing.
