Wall Street stocks fell, European equities rose, and oil edged down as traders assessed White House talks on the war in Ukraine and looked ahead to a key meeting of central bankers. President Trump hoped for progress with Putin on ending the war, but uncertainties remain. Nvidia’s decline pulled down the S&P 500 and Nasdaq, while the Dow remained flat.
European stocks rose as Asian stocks fell slightly. However, Europe’s gains were capped by declines in defense names, with the aerospace and defense index down 2.6%. Investors see the talks as a chance to take profits in the sector. Michael Arone, chief investment strategist, highlighted potential winners in European stocks such as industrial and financial companies.
Energy markets are assessing the chance of an end to the war in Ukraine, with oil prices falling on speculation that progress in talks could lead to the lifting of sanctions on Russian crude. However, analysts believe the developments are unlikely to significantly impact oil and gas markets. Brent crude futures were down at $66.06 a barrel.
The Federal Reserve’s upcoming Jackson Hole symposium is a key event for markets, with Chair Jerome Powell set to speak on the economic outlook and policy framework. Futures imply at least two rate cuts this year due to sticky inflation and slowing growth concerns. Powell’s comments will be closely watched, amid Trump’s pressure for rate cuts and speculation about Powell’s replacement.
Investors are anxious about Powell’s comments at Jackson Hole, fearing the Fed may be behind the curve. Trump’s push for rate cuts due to inflation data distorted by tariffs adds to the uncertainty. The potential impact on equities, government bonds, and the dollar remains unclear. The S&P 500 is expected to end 2025 below current levels due to ongoing concerns over tariffs and rate cuts.
Bond markets were calmer on Tuesday, with U.S., German, and British government bond yields falling. The dollar index was up, while gold dipped slightly. Longer-dated yields have been rising globally, with German and British 30-year yields testing multi-decade highs. Uncertainty surrounding the Fed’s rate cuts continues to influence market sentiment.
Read more at Yahoo Finance: Nasdaq tumbles, European shares rise as investors digest Ukraine peace efforts