U.S. stocks closed higher on Tuesday as Federal Reserve (Fed) Chairman Jerome Powell released positive signals of fighting inflation, while the European stock market has seen a decline due to complex factors.
Attending CEB Forum on Central Banking 2024 held in Sintra, Portugal on Tuesday, Powell said that the Fed has made great progress in fighting high inflation and has confidence in achieving its target of reducing the inflation rate to 2 percent.
Although Powell refused to give a clear answer on the specific time to start cutting interest rates, the market believed that his speech released a sufficient "dovish" signal. Some investment banks continued to be optimistic about the prospect of the Fed's first interest rate cut in September and two interest rate cuts within the year. Market risk appetite has been significantly boosted.
Affected by these factors, U.S. stocks closed higher on Tuesday.
The Dow Jones Industrial Average rose 162.33 points, or 0.41 percent, to 39,331.85. The S and P 500 added 33.92 points, or 0.62 percent, to 5,509.01. The Nasdaq Composite Index increased by 149.46 points, or 0.84 percent, to 18,028.76.
Nine of the 11 primary S and P 500 sectors ended in green, with consumer discretionary and financials leading the gainers by going up 1.81 percent and 1.10 percent, respectively. Meanwhile, health and energy led the laggards by dropping 0.4 percent and 0.2 percent, respectively.
In Europe, the three major stock indexes closed down on Tuesday, affected by factors including persistence of core inflation in the eurozone, European Central Bank (EBC) President Christine Lagarde's cautious view on the prospect of EBC interest rate cuts and the French parliamentary elections.
The British FTSE 100 Index closed at 8,121.20 points, down 45.56 points, or 0.56 percent. The Paris CAC 40 closed at 7,538.29 points, down 22.84 points, or 0.3 percent. Germany's DAX Index closed at 18,164.06 points, down 126.6 points, or 0.69 percent.
The latest data released by the Eurostat on Tuesday showed inflation in the eurozone at an annual rate of 2.5 percent in June, down from 2.6 percent in May. However, the core inflation, which stripes out energy, food, tobacco and alcohol prices, came in at 2.9 percent, higher than expected.
Lagarde said on Monday that the EBC is not anxious to conduct further interest rate cuts, but need more economic data to confirm that the inflation rate has steadily fallen back to the two-percent target.
Oil prices on Tuesday continued to hover at a relatively high level over the past two months.
Some analysts from investment institutions pointed out that the recent rebound in oil prices was mainly driven by geopolitical conflicts in the Middle East and the starting of hurricane season in the Gulf of Mexico, but these are short-term factors, which will not produce distinct effect on the fundamentals of crude oil supply and demand.
Oil prices soared during the trading time on Tuesday, but ended in a downward trend.
The West Texas Intermediate for August delivery dropped 56 cents, or 0.68 percent, to settle at 82.81 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude for September delivery decreased by 36 cents, or 0.42 percent, to settle at 86.24 U.S. dollars a barrel on the London ICE Futures Exchange.
As Powell's speech significantly boosted the risk appetite of financial markets, funds mainly flowed to the stock market. In addition, the yield on the 10-year U.S. Treasury note still hovered at the highest level in a month. These factors put pressures on gold prices, so international gold prices fell slightly on Tuesday.
U.S. stocks close higher Monday, while European stock market sees decline
The Shanghai Cooperation Organization (SCO) will surely build up strong momentum for upholding world peace and development, Foreign Ministry spokeswoman Mao Ning said at a press briefing in Beijing on Friday.
Mao made the remarks in response to a question about the summit.
The 24th Meeting of the SCO Council of Heads of State was held in Astana on Thursday. President Xi Jinping attended the Meeting upon invitation, and delivered the important statement titled Joining Hands to Build a More Beautiful Home of the Shanghai Cooperation Organization, Mao said.
"During the Meeting, President Xi had in-depth exchanges of views with leaders of other countries on global and regional issues of common concern, through which the leaders drew a blueprint and charted the course for SCO going forward with a series of consensus reached. Over 20 documents were adopted at the summit, including the Astana Declaration, the SCO initiative on world unity for justice, harmony and development, and the statement on the principles of good-neighborliness, trust and partnership. In particular, the Astana Declaration underscores adherence to the Shanghai Spirit, and reaffirms the commitments to building a new type of international relations and building a community with a shared future for mankind. The Declaration represents the common aspiration for greater solidarity and cooperation among SCO member states, and sends the positive message of the SCO shouldering the missions of the new era, and braving risks and challenges together for security and development. The summit delivered fruitful outcomes, gave a strong boost to the development of the SCO, and showcased the increasing appeal and influence of the SCO," she said.
"Amidst changes of historical significance across the world, President Xi Jinping development trend in the world, and stands at the strategic height of long-term development of humanity with a global vision and people-centered philosophy. He underscored the importance of having the wisdom to see the changes, the ability to deal with the changes, and the courage to make changes to cope with the major transformation. President Xi pointed out that the SCO region is facing the triple risks of the Cold War mentality, 'small yard with high fences,' and external interference and attempts to divide our region. He went on to provide three recommendations to address each of the risks, namely to hold the bottom line of security, safeguard the right to development, and cement solidarity. He called on all parties to uphold the Shanghai Spirit, and work together to keep the SCO on the right course forward. As President Xi stressed, countries in the SCO need to bear in mind that they live in a community with a shared future, always uphold the Shanghai Spirit, and stay firmly on the development paths that suit their respective national conditions and regional realities. He advocated building the SCO's common home of solidarity and mutual trust, peace and tranquility, prosperity and development, good-neighborliness and friendship, and fairness and justice," she said.
"President Xi Jinping's important speech was well received. The participants at the summit expect China to lend fresh impetus for the SCO as it takes over the presidency of the organization. They stressed that they will stay committed to the SCO, further tap into the potential for cooperation, fully expand and deepen cooperation, and ensure the outcomes of cooperation can be better delivered to the people. We are convinced that the SCO members will follow the trend of the times, move forward together in solidarity and cooperation to realize the aspirations of our people for a better life and jointly build up strong momentum for upholding world peace and development," Mao said.
SCO to build up strong momentum for upholding world peace, development: spokeswoman
